President Biden said Sunday that he believes he has the right to challenge the constitutionality of the nation’s borrowing limit but he does not believe such a challenge could succeed in time to avoid a federal default if Legislators aren’t raising the limit anytime soon.
“I think we have the authority,” Biden said at a news conference after the G7 summit in Hiroshima, Japan. “The question is whether it can be implemented and used in a timely manner.”
Mr. Biden added that once the current crisis is resolved, he hopes to “find reasonable grounds and take it to court” to decide if the debt limit violates an Amendment provision. 14th stipulates whether the United States must pay its debts. He also said that, while meeting with world leaders, he was unable to assure them that America would not default — an event that economists say could trigger a crisis. global financial crisis.
“I can’t guarantee that they won’t force default by doing something outrageous,” Biden said, referring to Republicans in Congress who have insisted on deep spending cuts. federal funds in exchange for an increase in the loan limit.
Mr. Biden and Speaker Kevin McCarthy are negotiating a financing package that includes raising that loan ceiling. They differ widely on key issues, including federal spending limits, new job requirements for some recipients of federal anti-poverty assistance, and funding aimed at helping the IRS crack down on low-income earners. high income and tax evasion corporations.
The two men were due to speak by phone on Sunday shortly after the news conference as Mr. Biden headed back to Washington in hopes of reviving stalled negotiations. The conversation will follow a weekend in which Republican leaders and White House officials delivered accusations from half a world away – punctuated by attacks by Biden targeted Republicans during a press conference.
Treasury officials estimate that there are just over two weeks left before the federal government could default on paying its bills on time, forcing a default. Both Mr. Biden and Mr. McCarthy late last week expressed growing optimism that they could strike a deal that would pave the way for Congress to raise borrowing limits while reducing some federal spending, something the party has sought. Republic has insisted as a condition on any debt. – increase limit.
“The difficulty is that nothing is agreed upon,” McCarthy told Fox News’ “Sunday Morning Futures.” “All of the discussions we’ve had before, I feel we’re at a place where we can agree, that we’re going to have a compromise.”
Instead, McCarthy argued, the president “went abroad and now he wants to change the debate.”
Treasury Secretary Janet L. Yellen is expected to provide another update to Congress on the federal government’s cash balance sometime this week. On Sunday, Yellen said her projections that the United States might not be able to pay all of its bills on time as soon as June 1 remained unchanged.
“I certainly haven’t changed my assessment, so I think it’s a tough deadline,” Yellen said on NBC’s “Meet the Press.”
Ms Yellen noted that the government is expected to receive substantial tax payments by June 15. prolong the so-called X-date then in the summer. But she warned that it would be difficult to get to that day and that the chances of getting there were “quite low”.
Minister of Finance, who warning last week that default would “create an economic and financial disaster,” she said, not exaggerating the severity of the impending crisis.
“There will be tough choices if the debt ceiling is not raised,” Yellen said, explaining that if the US runs out of money to pay all of its bills, some bills will go unpaid.
Those hopes have waned at least a little over the past 48 hours. Biden aides accuse Republicans of slipping in key negotiating areas, and Republicans accuse the White House of refusing to give in to top conservative priorities.
Mr. Biden criticized Republicans on Sunday for not considering increasing additional tax revenue to reduce future budget deficits as part of the negotiations. He said he proposed a discretionary spending cap that would save $1 trillion over a decade compared to baseline projections.
“It is time for Republicans to accept that no budget deal is done on their partisan terms alone,” he said.
Representative Jodey C. Arrington, Republican of Texas and Chairman of the Budget Committee, on Sunday flatly denied Republicans would accept any tax increases as part of a debt-restricting deal despite the disagreements. Presidential push.
“It’s not on the table to discuss,” Mr Arrington told ABC’s “This Week.” “This is not the time to tax our economy or working families.”
Several prongs appear to strengthen each side’s base. Hardliners in the House of Representatives have urged McCarthy to demand more concessions from Biden. Some progressive Democrats have pushed Biden to cut talks and instead act unilaterally to challenge the debt limit on constitutional grounds.
Senator Bill Cassidy, Republican of Louisiana, said using the 14th Amendment would be a violation.
“It’s yet another example of the president taking the constitutionally authorized spending power from the House and trying to aggregate it into the White House,” he said on CNN’s “State of the Union.”
The two sides found some agreement during talks last week, including recoup some unused funds from the previously approved Covid relief law. They have also broadly agreed to some sort of limit on discretionary federal spending for at least the next two years. But they are preoccupied with the details of those limits, including how much total spending next fiscal year will be on discretionary programs — and how that spending will be divided among the military and other programs.
The latest White House proposal would keep both military and other spending – including education, scientific research and environmental protection – unchanged from the current fiscal year to the next. someone familiar with the proposals of both sides. That move would not reduce nominal spending before adjusting for inflation, which Republicans are working to do. Asked by a reporter on Sunday, Mr. Biden said the spending cuts he proposed would not cause a recession.
A bill that Republicans passed last month that combines spending cuts with an increase in the debt limit would result in net savings of about $5 trillion over a decade compared with current projections.
The latest Republican proposal includes reducing total discretionary spending next year. But that cut is not evenly distributed; In their plan, military spending will continue to increase, while other programs will face deeper cuts.
Mr. Biden’s proposal would set a spending cap for two years. Republicans will set them up in six years.
Republicans have also proposed several efforts to save money that White House officials have opposed. These include new work requirements for Medicaid recipients and the Temporary Assistance for Needy Families program. They will also make it harder for states to find exemptions from the work requirements for some federal food aid recipients living in areas with persistently high unemployment – a proposal not included in the Republican debt limit bill passed the House of Representatives.
Republicans are also continuing to work on ways to reduce enforcement funding for the IRS, a move that the Congressional Budget Office estimates will actually make the deficit bigger by reducing federal tax receipts in future. And they managed to include some terms from a strict immigration bill recently passed the House of Representatives, according to a person familiar with the proposal.
“We are all concerned about deficits and fiscal liability, but deficits can be addressed through changes in spending and through changes in revenues,” Ms. Yellen said, adding that She is “very concerned” about Republican proposals to cut funding for the budget. IRS
Republican leaders on Saturday continued to blame White House negotiators for what they called a deterioration in the discussions.
“The White House is going backwards in negotiations,” McCarthy wrote on Twitter. In a separate post, he blamed Mr. Biden for the impasse, saying the president did not “think there is a dollar of savings to be found in the federal government budget.”
Mr. Biden insisted on Sunday that he was willing to cut spending. He also suggested that some Republicans are trying to disrupt the economy by not raising the borrowing limit, in order to hurt Biden’s re-election hopes.
If the country defaults, Mr. Biden said, “I will be innocent” of merit – meaning it will be the fault of the Republican Party. But, he said, “politically speaking, no one can be innocent.”
“I think there are some MAGA Republicans in the House who know the damage it will do to the economy, and because I’m the president and the president is responsible for everything, Biden will be responsible for it. duty,” he said.
Alan Rappeport, Carl Hulse And Chris Cameron contribution report.
