President Biden and Speaker Kevin McCarthy emerged after a key White House meeting on Tuesday with no consensus on how to end their stalemate over federal debt and spending just a few minutes. week before the State failed to meet its obligations for the first time.
With the economy in balance, the two leaders kept their opening positions intact, with Biden asking Congress to raise the debt ceiling unconditionally to avoid default and McCarthy insisting. Such a move must be accompanied by severe spending restrictions. But both agreed to have aides meet at the end of the day and reconvene on Friday.
The Oval Office session, the first such meeting in three months between the Democratic president and the Republican speaker, was the opening act in a play expected to unfold over the next few weeks as the nation is approaching a deadline of about June 1 before running for office. exhausted its authority to pay its debts. Neither side expected the meeting to produce a breakthrough, and it did not. Instead, it’s an opportunity for both sides to set the stage for a fruitful debate.
“I made it clear in our meeting that default is not an option,” Biden said after the Oval Office session. “I have said that over and over again. America is not a deadlocked country. We pay our bills and avoid default is a fundamental duty of the United States Congress.”
However, he added: “I am open to starting a private discussion about my budget and spending priorities but without the threat of default.”
Meeting with reporters as he left the White House, Mr. McCarthy said the two sides remained at odds. “I don’t see any new movement,” he said. He added that he asked Mr. Biden “many times” if there were places in the federal budget where they could cut. “They wouldn’t give me any,” he said.
In a possible sign of progress, the two sides have agreed to have their employees meet as early as Tuesday night and daily through the week to discuss possible agreements on how much to pay. spending bills to fund government operations next year — which could lead to the kind of broader financial deal that Biden has said he will discuss.
But the Democratic leaders who attended the meeting, Senator Chuck Schumer and Representative Hakeem Jeffries of New York, stressed that any such discussion was not tied to raising the debt ceiling, arguing that It is irresponsible to jeopardize the financial health and economic well-being of the nation through tactics. advantage.
“There are probably some points we can agree on, some points we can compromise,” Schumer said of federal spending. But that must happen separately, not as part of debt ceiling negotiations, he said, maintaining the White House’s position.
The federal government has reached a legally mandated $31.4 trillion debt ceiling, and the Treasury Department said it could use all its financing methods to avoid default by the end of the month. If that happens without the consent of Congress, the country will not meet its obligation to pay for the previously approved spending, which analysts say could trigger a wave. economic shock wave to the domestic and worldwide economy, potentially causing a recession and causing millions of people to lose their jobs.
Both the White House and Mr. McCarthy rejected the idea of raising the short-term debt ceiling to allow more time to discuss, but time is running out. The speaker told reporters on Capitol Hill that he believes congressional leaders and Mr Biden will need to strike a deal next week to pass legislation to raise the debt ceiling by early June.
Senator Mitch McConnell of Kentucky, the Republican minority leader in the Senate, accompanied McCarthy to the meeting and endorsed his position, stressing that the president has an obligation to compromise the House held by the Republican Party. But he insisted in his opening remarks about the driveway to the White House that he was committed to avoiding default, alluding to some discomfort during the debate. “First, let me make a point: the United States will not default,” he said. “Never had and never happened.”
Democrats sought to use that comment to isolate Mr. McCarthy, suggesting that he was the only one willing to risk default. But the speaker said he was the only one who actually approved an increase in the debt ceiling, referring to legislation that binds such a ceiling increase to spending limits and other measures.
He emphasized that the president had refused to meet with him for 97 days, alleging that Mr Biden had acted irresponsibly by not agreeing to compromise. “I hope that the next two weeks will be different,” McCarthy said. “I hope this president understands as the leader of this country that you cannot sit idly by and hold the country hostage. You cannot be so extreme in your opinion that you will not negotiate. And to the American public, we’ve been very sensible.”
Mr. Biden blamed Mr. McCarthy for not passing the cap raising bill until the end of April. The president left open the possibility that he might seek to bypass Congress and pay the debts himself by asserting power under a 14th Amendment provision that says “the effect of the public debt of the United States “as permitted by law” “will not be questioned.” He noted that Laurence H. Tribe, a longtime professor at Harvard Law School, changed my mind about whether a president has such power.
But he points out that solution may not work in the short term. “The point is it’s going to have to be litigated and in the meantime, if it’s not renewed, it’s going to stay in place,” he said. He added that he is thinking of checking the outlook several months after the resolution of the current crisis, to avoid future conflicts over the debt ceiling.
Further complicating the schedule: The President is expected to fly to Japan next week for a summit of leaders of the Group of 7 industrialized nations, before attending the summit on security in Australia. Speaking to reporters after the meeting, Biden said it was “possibly, but not likely” that he would have to shorten or skip the trip because the debt ceiling debate is “the most important thing in the program.” agenda”.
The continued stalemate could increasingly shake financial markets in the coming days and weeks, as investors grow increasingly concerned that the federal government will default on debt and begin to miss payments. payments for government employees, Social Security recipients, and others.
While there was no deal on Tuesday, Mr Biden in nearly 20 minutes of comments and questions from reporters on Tuesday night said he was “more optimistic” that they would find a way to avoid default even if he open to some Republican demands on fiscal policy.
Crucially, that openness includes saying that the Republican effort to cancel some of the Covid-19 pandemic relief funds that have yet to be spent – after being approved by Congress in 2021 – has been “placed on the table”. The recovery is a relatively small, but significant, part of the Republican debt-limiting bill that passed the House last month. Mr. Biden’s comments were the first time he expressed the possibility that he could accept anything from that bill.
However, Mr. Biden spent much of his comments criticizing Republicans for the much larger and more ambiguous spending cuts in their bill. And he has defended himself and his team by asserting that the Republican bill would cut popular items like veterans benefits, a claim Mr. McCarthy vehemently complained was false. Real.
“I don’t think they’re sure exactly what they’re suggesting,” the president said.
