President Biden and House Speaker Kevin McCarthy agreed on Sunday to meet Monday afternoon to kickstart negotiations to avoid a default on the country’s debt, which stalled last weekend as the two clashed over Republican allegations. put an end to the turbulent negotiations. He demanded spending cuts in exchange for raising the debt ceiling.
McCarthy announced on Sunday that he would hold his third meeting with Biden, after the president’s return from the seven-nation summit in Hiroshima this month, after concluding a phone call with Biden. Announced. contract outlook.
He said House Republicans and White House negotiators will continue talks in the Capitol on Sunday to lay the groundwork. White House negotiators left the Capitol on Sunday night after two-and-a-half hours of negotiations with Republicans, but said they plan to continue working through Monday’s talks.
Biden “looked at some of the things that are still under consideration, what I’m hearing from members. I’ve really looked around what I see,” McCarthy said. “That part felt productive. But look, there’s no agreement. We’re still apart.”
Negotiators are grappling with a tough time race. The debt ceiling, a statutory limit on the government’s ability to borrow to pay its debts, is expected to be reached as early as June 1.
Biden and McCarthy are negotiating a fiscal package that would raise the ceiling, but Republicans have refused to implement it without spending cuts. The two sides remain very different on key issues such as federal spending caps, new labor requirements for some recipients of federal anti-poverty assistance, and funding to help the IRS crack down on high-income earners and tax evaders. there is
Biden on Sunday believed he had the right to challenge the constitutionality of the nation’s borrowing limit, but such a challenge would not come before lawmakers would avoid a federal default if the limit is not raised. He said he did not expect the appeal to succeed. soon.
“I think we have the authority,” Biden said at a news conference in Hiroshima. “The question is whether it can be executed and triggered in time.”
Biden added that he hopes to “find the grounds and bring it to court” to decide whether to raise the debt ceiling after the current crisis is resolved. Violate a provision of the 14th Amendment It stipulates that the United States must pay its debts. He also said that when he met with world leaders, he could not guarantee that the United States would not default on its debt. Economists say a default could trigger a global financial crisis.
“I can’t guarantee that they won’t do something outrageous to force them into default,” Mr. Biden said, referring to congressional Republicans who have argued for drastic cuts in federal spending in exchange for higher borrowing limits.
“The numbers are the foundation here,” said Louisiana Republican Rep. Garrett Graves, one of McCarthy’s chief negotiators, on Sunday. “The speaker made it very clear: the red line is spending cuts, and unless we get there, the rest of it means nothing at all until we get there.”
Treasury officials estimate they have just over two weeks left before the government loses its ability to pay its bills on time and is forced into default. Mr. Biden and Mr. McCarthy grew more optimistic last week that they could reach a deal that cuts some federal spending and paves the way for Congress to raise its borrowing cap.
But on Friday, things stalled as Republicans abruptly halted the talks, sparking a weekend of pause-and-start negotiations, with McCarthy insisting Biden to reinstate him.
Treasury Secretary Janet L. Yellen is expected to present a new update on the government’s cash balance to Congress this week. Yellen said Sunday that his own view remains unchanged that the U.S. could fail to pay all its bills on time as early as June 1.
“I think it’s a tough deadline because I certainly haven’t changed my rating,” Yellen said on NBC’s “Meet the Press.”
Yellen said the government expects a large tax payment on June 15th. extend the so-called X date Then through the summer. But she warned that she was “very unlikely” to get there.
The Finance Minister warned last week He said a default would “cause economic and financial catastrophe” and did not overstate the severity of the immediate crisis.
“If the debt ceiling is not raised, we will have to make difficult choices,” Yellen said, adding that if the U.S. runs out of money to pay all the bills, some will be forced to default. explained.
Hopes have faded at least slightly in the last few days. Mr. Biden’s aides have accused Republicans of backtracking on key areas of the negotiations, and Republicans have accused the White House of refusing to compromise on top priorities for conservatives.
Mr Biden on Sunday accused Republicans of not considering raising additional tax revenues to reduce the future deficit as part of the negotiations. He said he proposed a discretionary spending cap that could save $1 trillion over 10 years compared to baseline projections.
“It’s time for Republicans to admit they can’t make a budget deal on partisan terms alone,” he said.
Rep. Jody C. Arrington, the Republican Texas budget committee chairman, on Sunday flatly denied the possibility of the Republican Party accepting a tax increase as part of the debt-restriction deal.
“It’s not on the table,” Arrington told ABC’s “This Week.” “Now is not the time to tax our economy or working families.”
Some of the barbs traded by both parties were likely intended to strengthen their own base. Fiscal hardliners in the House are urging McCarthy to demand much bigger concessions from Biden. Some progressive Democrats are pressuring Mr. Biden to end negotiations and instead take unilateral action to challenge the debt ceiling on constitutional grounds.
A provision of the Fourteenth Amendment, adopted after the Civil War, states that the “validity of public debt” issued by the United States government is “not questioned.” Some legal scholars argue that the restriction is constitutional. However, some argue that the clause requires the government to continue issuing new bonds to pay bondholders, effectively nullifying the country’s statutory borrowing limits administered by Congress. .
The two countries found some agreement in talks last week, including reclaiming some of the unused funds from previously approved coronavirus relief bills. They also broadly agreed to put some cap on federal discretionary spending for at least the next two years. But they stick to the details of the cap, how much to spend on discretionary programs over the next fiscal year, and how that spending will be split between the military and other programs.
The White House’s latest proposal would hold both military spending and other spending, including on education, scientific research and environmental protection, flat this year and into next, according to people familiar with both proposals. . The move does not cut nominal spending before inflation, something Republicans are eager to push. Asked by reporters on Sunday, Mr. Biden said his proposed spending cuts would not trigger a recession.
The combined spending cuts and debt ceiling increase bills passed by Republicans last month will result in net savings of about $5 trillion over 10 years compared to current projections.
The latest Republican proposal includes a nominal reduction in total discretionary spending next year. However, the distribution is not even. Under their plan, military spending will continue to rise while other programs face significant cuts.
Biden’s proposal would set a spending cap for two years. Republicans would set it at six years.
Republicans have also proposed several initiatives to cut costs that White House officials have opposed. These include new work requirements for recipients of Medicaid and the Temporary Assistance for Needy Families Program. It would also make it harder for states to seek waivers from the work requirement for certain federal food aid recipients living in areas of high unemployment, but the proposal is part of the Republican debt-relief bill that passed the House of Representatives. was not included.
Republicans also continue to push for cuts in enforcement funding to the IRS, a move the Congressional Budget Office estimates will increase the deficit by reducing future federal tax revenues. and they strict immigration laws The proposal recently passed the House, according to people familiar with the matter.
“We are all concerned about deficits and fiscal responsibility, but deficits can be addressed through both changes in spending and changes in revenues,” Yellen said, referring to Republican proposals to cut funding for the IRS as “extremely difficult.” I am concerned about,” he added.
Mr. Biden insisted on Sunday that he was open to spending cuts. He also suggested that some Republicans are trying to undermine Biden’s re-election hopes by crashing the economy by not raising his credit limit.
If the country defaults, Mr. Biden said, “I’m not guilty of anything,” on the bill, meaning the Republicans are to blame. But “politically, no one is to blame,” he says.
“I think some of the MAGA Republicans in the House of Representatives know the damage it does to the economy. I’m the president and I’m responsible for everything, so Biden should be held accountable.” will be,” he said.
Allan Lapeport, Karl Hals and Chris Cameron contributed to the report.
