President Joe Biden and Chairman Kevin McCarthy are gearing up for a Monday showdown at the White House as time is running out toward the June 1 deadline to prevent the country from defaulting on its debt.
Biden reignited the talks – after they stalled over the weekend – when he called Air Force One’s McCarthy as he was returning to the United States from attending the G7 summit in Japan.
The speaker called the conversation “productive”.
McCarthy sounded optimistic as he addressed reporters on Capitol Hill, saying that after his conversation with the president, he was hopeful a deal would be reached.
“Time is running out,” he noted.
President Joe Biden called House Speaker Kevin McCarthy aboard Air Force One as he flew back to the United States from Japan. Biden boards Air Force One at US Marine Corps Air Station Iwakuni after attending the G7
House Speaker Kevin McCarthy, pictured in the Capitol Rotunda on Sunday, called his conversation with Biden “productive.” Biden and McCarthy will meet in Washington on Monday after Biden returns from Japan
Shortly after the two leaders spoke, talks resumed at the staff level. White House aides Shalanda Young, Louisa Terrell and Steve Ricchetti met with Republican Representatives Garret Graves and Patrick McHenry — who make up McCarthy’s team — for two and a half hours on Capitol Hill Sunday night.
“We will continue to work tonight,” Ricchetti told reporters as the teams left the president’s office.
The Treasury Department, meanwhile, is sticking to its June 1 deadline to raise the country’s borrowing limit, now at $31 trillion, so the United States can pay its bills. Otherwise, he will default on his debt.
“I think it’s a tough deadline,” Treasury Secretary Janet Yellen said on NBC’s Meet the Press show. “It’s hard to be absolutely certain, but my assessment is that the chances of reaching June 15 and still being able to pay all our bills are quite low.”
A US default could trigger a global economic recession. When the talks broke down on Friday, the stock market fell.
Any agreement must be bipartisan, both sides acknowledged. Republicans hold only a five-seat majority in the House and Democrats control the Senate.
Negotiations now focus on cutting spending.
Graves said the talks focused on the extent and duration of new restrictions on federal spending.
Shalanda Young, director of the Office of Management and Budget, one of President Joe Biden’s key mediators in the debt limit debate, returns to Capitol Hill on Sunday as talks resume
Steve Ricchetti, adviser to the president and one of President Joe Biden’s key mediators in the debt talks, returns to the Capitol on Sunday after talks hit a snag earlier in the weekend.
Once that’s in place, he noted, “everything else cascades.”
McCarthy said after his call with Biden that “I think we can work out some of these issues if he understands what we’re looking at.”
“But I was very clear with him from the start. We need to spend less money than we spent last year,” he said.
Biden, meanwhile, expressed his exasperation with Republicans, calling on them to leave their “extreme positions” and realize that any deal must be bipartisan.
The president also said he would consider using the 14th Amendment to solve the US debt ceiling, although he admitted it was probably too close to the June 1 default deadline to use it. in this round.
“I’m looking at the 14th Amendment to find out whether or not we have the authority,” he said at a news conference in Hiroshima on Sunday evening.
“I think we have the authority. The question is, could it be done and invoked in time so that it would not be appealed and therefore miss the date in question and still default on the debt?
Biden said he would be willing to explore the option in court to see if they would rule it legal or not.
The president previously ruled out using the constitutional amendment — which some legal scholars say contains a clause that would make it unconstitutional for the United States to default on its debt — to raise the debt ceiling.
Biden also accused Republicans of trying to derail debt talks to hurt his re-election bid, admitted he may be able to stop them from defaulting, and said he would step in to deal with with Chairman Kevin McCarthy one-on-one. A.
Treasury Secretary Janet Yellen (right) reiterated to NBC’s Chuck Todd (left) on Meet the Press Sunday that June 1 remains the default deadline as debt talks come to a head
How the 14th Amendment applies to US debt
Many jurists suggest that a clause in the 14th Amendment stating that “the validity of the public debt, authorized by law … shall not be questioned” could apply to the debt ceiling.
Legal experts argue that Section 4 of the 14th Amendment allows the Treasury Department to continue to borrow money beyond the debt limit and that it would be unconstitutional for the United States not to borrow. payments.
Some Democrats are urging Biden to invoke the constitutional amendment to prevent the country from defaulting.
During his press conference, Biden had a harsh speech for Republicans, criticizing them for taking an ‘extreme stance’ in the talks and said he would speak to McCarthy from Air Force One as he returned from Japan.
“I guess he’s going to want to deal directly with me to make sure we’re all on the same page,” Biden said of McCarthy, adding that he believed a compromise remained within reach.
“I hope President McCarthy is just waiting to negotiate with me when I get home. … I’m waiting to find out.
The White House had accused House Republicans of backtracking the talks by refusing their offer to cut spending and instead making what Democrats call outrageous demands to cut the federal budget.
Biden, who has announced he is seeking a second term, has indicated he believes politics is at stake.
He said if the nation defaults, “Biden would take responsibility and that’s one way to make sure Biden doesn’t get re-elected.”
‘On the merits based on what I offered, I would be blameless. Politically, no one would be blameless,” he said.
He called on the Republicans to compromise.
“It’s time for Republicans to accept that there is no bipartisan deal to be made solely – solely – on their behalf and on their terms. They also have to move,” he said.
He also expressed some exasperation with the other party, saying he couldn’t “guarantee that they would enforce a default by doing something outrageous.”
Previous debt talks took a downward turn with both sides accusing the other of negotiating in bad faith.
Republicans rejected a bid from the Biden administration that would have kept discretionary non-defense and defense spending flat next year from fiscal year 2023, according to reports.
McCarthy said he wanted to cut non-defense spending from what had been spent in previous years.
Democrats argue that keeping those numbers flat equates to an effective reduction due to inflation, at a rate of up to 5%.
The White House argued that with inflation, this would equate to a 5% cut in spending.
The two sides are vying for spending cuts. The Republicans are demanding them in exchange for raising the debt ceiling.
House Republicans have passed a bill that would bring spending back to fiscal year 2022 levels and impose a 1% cap on future spending for a decade. But he was dead when he arrived in the Democratic-controlled Senate.
The White House dismissed the GOP demands as too extreme, but expressed a willingness to cut some spending.
In order to secure a deal, spending cuts must be large enough to be accepted by conservative Republicans, but also acceptable to Democrats, who hold the Senate and will likely need to deliver between 50 and 100 votes in the House.
Republicans, in addition to spending cuts, want to increase defense spending in the 2024 federal budget.
Democrats argue that for this to happen, social programs, education and health care would have borne the brunt of the cuts. The progressive wing of the Democratic Party would not support that.
Additionally, Republicans have refused to roll back Trump-era tax breaks for corporations and wealthy households, as Biden has proposed.