Global Courant 2023-05-23 05:28:51
US President Joe Biden, a Democrat, has held a sit-down meeting with Republican House Speaker Kevin McCarthy to discuss raising the country’s debt ceiling, which limits how much the federal government can borrow to pay its bills. to pay.
But again, a solution to the country’s looming debt crisis remains elusive as the government runs out of money as early as June.
Still, McCarthy was optimistic as he left the White House on Monday. “I think the tone tonight was better than any other time we had discussions,” McCarthy told reporters at a news conference. “I felt it was productive.”
North Carolina Representative Patrick McHenry, who is part of the Republican negotiating team, echoed that assessment.
“We have had difficult meetings. We’ve had difficult meetings. This meeting was productive,” McHenry said at the press conference. “It told us, as a negotiating team, some more details that we need to get to a package — a package that can pass Congress.”
McCarthy added that he felt a deal to raise the debt ceiling is within reach before the June deadline – “I believe we can pull it off” – but gave few details about what compromises both sides were willing to make.
‘Nothing has been agreed. Everything is talked about,” he said teasingly that negotiators would “work through the night” on possible solutions.
The $31.4 trillion debt ceiling has become a perpetual subject of political stalemate in recent years as Republicans seek to curb government spending by cutting Social Security programs, a prospect many Democrats dread.
Meanwhile, the Biden administration has previously called for a “clean” increase in the debt ceiling with no conditions attached. Separately, Biden has called on wealthy Americans and big corporations to pay “their fair share” in taxes to boost government revenues and tackle the national debt.
US Treasury Secretary Janet Yellen said it is “impossible to predict with certainty the exact date” when the government will default on its loans, but estimates the deadline could come as early as June (File: Elizabeth Frantz/ Reuters)
‘Most likely’ default in early June
Monday’s meeting at the White House comes shortly after Treasury Secretary Janet Yellen issued her statement third letter to Congress within as many weeks, urging lawmakers to act “as soon as possible”.
Yellen’s post on Monday emphasized that “it is very likely” that the US government could default on its payments as early as June 1, a deadline less than a week and a half away.
She also warned that the political impasse has already led to concrete consequences. “We have already seen Treasury borrowing costs rise significantly for securities maturing in early June,” she wrote.
“If Congress fails to raise the debt limit, it would cause serious distress to American families, damage our global leadership position and raise questions about our ability to defend our national security interests.”
Economists have predicted that if the US government defaults on its loans, it could potentially trigger a recession and lower the country’s credit rating, resulting in higher interest rates and greater overall pressure on the economy. Veterans, Social Security recipients, and other individuals and businesses that rely on government funds could stop or delay their payments.
US President Joe Biden and Republican House Speaker Kevin McCarthy are seen together in the Oval Office for debt ceiling talks on May 22 (Leah Millis/Reuters)
Volatile negotiations and a shortened journey
A flurry of negotiations preceded Monday’s meeting at the White House, as members of Biden’s and McCarthy’s respective camps met to work out details.
The talks came after a restless weekend of negotiations. On Friday, talks between White House advisers and Congressional Republicans came to a halt when McCarthy abruptly ended negotiations.
He attributed the “pause” to frustration with the White House and a lack of progress in the negotiations. Talks resumed briefly later that evening.
Biden was in Japan at the time for the Group of Seven (G7) summit as part of a trip that originally included stops with allies in the Pacific region. However, amid criticism for being absent from key debt negotiations, Biden’s team cut the trip and canceled planned visits to Australia and Papua New Guinea.
Flying back to Washington, D.C., from Japan on Sunday, Biden spoke to McCarthy by phone, rekindling debt negotiations. Both sides were optimistic.
“It went well. We’ll talk tomorrow,” Biden told reporters as he landed in the US. McCarthy, meanwhile, described the call as “very productive” and confirmed he felt they could find “common ground.”
In the aftermath of Sunday’s phone call, negotiators met at the US Capitol for more than two hours on Sunday evening and again for nearly three hours on Monday, laying the groundwork for a meeting between the two leaders.
US House Speaker Kevin McCarthy has rejected the prospect of a near-term debt ceiling extension (File: Nathan Howard/Reuters)
Republicans are pushing through existing bill
After Monday’s White House meeting, McCarthy again rejected the prospect of a “clean” debt ceiling increase, saying he would lift the country’s borrowing limit only if government spending was capped.
He also rejected the possibility of cutting defense funds to limit government spending, and also authorized a short-term extension of the debt ceiling.
“I don’t think anyone would benefit from a short-term extension,” McCarthy told reporters. “If it’s a short-term extension, I think the country looks like we’ve failed somehow, that we can’t do what we should.”
Republicans have proposed keeping spending at 2022 levels for the next fiscal year, but the White House is trying to keep government spending at 2023 levels.
Another question on the negotiating table is how long such a spending ceiling would last: the Republicans are pushing for six years, instead of ten years. But Democrats hope to limit any spending cuts to a two-year deal so that government spending can keep up with inflation.
Republican negotiators like McHenry have also continued to tout a bill passed by the House of Representatives in April that would raise the debt ceiling by $1.5 trillion in exchange for concessions targeting Biden’s domestic platform .
The bill would increase job requirements for recipients of government safety net programs such as Medicaid and the Supplemental Nutrition Assistance Program and reclaim a funding increase for the Internal Revenue Service that is expected to boost federal revenue.
It would also block the student finance initiative signed by Biden and end renewable energy tax breaks as part of the Inflation Reduction Act. Biden previously threatened to veto the bill if it reaches his desk.
“We have a position. We threw it out of the house. For days, for weeks, for months, the president demanded that we pass on a product. We passed on a product. We are negotiating here,” McHenry said Monday. is resolved until it is all resolved.”
