U.S. President Joe Biden holds a news conference at the conclusion of the G7 Summit, in Hiroshima, Japan, May 21, 2023.
Jonathan Ernst | Reuters
When a possible default is only 11 days away, the President Joe Biden and the Speaker of the House of Representatives Kevin McCarthyR-Calif., will meet in person on Monday to resume negotiations around the debt ceiling.
McCarthy told reporters he had a “productive” call with Biden on Sunday and that staff on both sides would resume negotiations later that day. A White House spokesman confirmed to NBC News that staffers will restart talks at 6 p.m. Sunday and Biden and McCarthy will meet on Monday.
lift the debt ceiling is necessary for the government to cover spending commitments approved by Congress and the president to prevent default. Raising the debt ceiling doesn’t allow for new spending, but House Republicans have said they won’t raise the cap if Biden and lawmakers don’t agree to future spending cuts.
As a result, repeated discussions on Capitol Hill was stressed.
Biden said earlier on Sunday that Republicans “need to move from their extreme position” during a press conference before leaving the G7 Summit in Japan. After negotiations stalled late Saturday, Biden said he planned to phone McCarthy on his way back to Washington.
“It’s time for Republicans to accept that no bipartisan deal is made on their partisan terms alone,” Biden said.
McCarthy told reporters on Sunday after arriving at the Capitol that he was glad the president was coming back to the United States
“I think he has to leave the socialist side of the Democratic Party and represent America. And that means there has to be compromise on both sides,” McCarthy said Sunday. “I was there the whole time.”
Finance Minister Janet Yellen said on Sunday that “hard choices” would need to be made about which bills would go unpaid if the debt ceiling was not raised.
Yellen reaffirmed her warning that the United States could default on its debt if as early as June 1which she said could cause the spread”economic turmoil.” There will be no good results if Congress does not act, she said.
“We’re focused on raising the debt ceiling and will have to make tough choices if that doesn’t happen,” she told NBC’s “Meet the Press.” “There can be no acceptable outcome if the debt ceiling is not raised, no matter what decisions we make.”
At the U.S. Bank Independent Community Capital Summit on Tuesday, Yellen said The White House Council of Economic Advisers found that a default could lead to a recession as bad as the Great Recession, with 8 million Americans losing their jobs and stock market values falling about 45%. .
She also noted a report by Moody’s Analytics showed similar numbers with more than 7 million Americans out of work and $10 trillion in household wealth evaporating. Yellen also warned that breaching the debt ceiling could affect essential government services.
Biden said Sunday that he thinks a deal can be reached with Republicans, but that is uncertain.
“I can’t guarantee that they won’t force default by doing something outrageous,” he said.
