WASHINGTON – Get ready for another week – or two – of negotiations on the debt ceiling, even as the clock ticks toward a possible government default next month.
President Joe Biden and House Speaker Kevin McCarthy planned to meet again Monday as lawmakers recalibrated their arguments after talks broke down this weekend over GOP demands for spending cuts as part of a deal to increase the debt ceiling.
The president and the speaker had a “productive” telephone conversation as Biden flew back Sunday from an economic summit in Japan, McCarthy announced.
Speaking earlier with reporters at the G-7 summit, Biden cast GOP demands as “extreme,” and added that “I can’t guarantee that they wouldn’t force a default by doing something outrageous.”
McCarthy, in an interview on Fox News, said negotiations can’t re-start until Biden is back in the country; the GOP speaker also said spending remains the main Republican issue of debt ceiling talks.
“It’s a sheer spending problem,” McCarthy said.
A political and economic battle with many moving parts, the state of debt ceiling play includes:
Biden blames the GOP
Biden has raised the prospect of unilateral action to pay the nation’s bills, but told reporters at the G-7 summit in Japan that there probably isn’t enough time before a proposed deadline of June 1.
While citing the 14th Amendment to the U.S. Constitution – which says the “validity of the public debt … shall not be questioned” – Biden also questioned whether enough time is left to try such a maneuver.
“I think we have the authority,” Biden said. “The question is, could it be done and invoked in time … We have not come up with unilateral action that could succeed in a matter of two weeks or three weeks. That’s the issue. So it’s up to lawmakers.”
Biden also protested the fact that Republicans are unwilling to entertain the idea of closing the federal budget deficit by raising taxes on the wealthy.
Biden says Republicans must move from ‘extreme positions’ in debt ceiling talks
Is the deadline June 1 – or a little later?
There is some uncertainty as to the “real” deadline here.
Treasury Secretary Janet Yellen, appearing on NBC’s Meet The Press, said the true deadline is up in the air and the government could conceivably pay its bills beyond June 1 (a week from Thursday) – but not for long.
“There’s always uncertainty about tax receipts and spending,” Yellen said. “And so it’s hard to be absolutely certain about this, but my assessment is that the odds of reaching June 15th, while being able to pay all of our bills, is quite low.”
Yellen also echoed warnings about a default that would gut markets worldwide and probably hasten a recession. Yellen told NBC that a default would cripple existing government programs, from Social Security and Medicare to military pay.
“There can be no acceptable outcomes if the debt ceiling isn’t raised, regardless of what decisions we make,” Yellen said.
What happens if the US defaults? What you need to know as the debt ceiling deadline nears.
Republicans blame Biden
Appearing on Fox News’ Sunday Morning Futures, McCarthy said he would speak with Biden on Sunday about the way forward. While Biden was at the G-7, White House and House Republican teams negotiated, but broke off talks over ongoing disputes.
McCarthy accused Biden of backing off on spending cuts based on pressure from the more liberal members of his party.
Biden would “rather be the first president in history to default on the debt than to risk upsetting the radical socialists who are calling the shots for Democrats right now,” McCarthy tweeted over the weekend.
McCarthy and other Republicans are also being pushed by ex-President and 2024 candidate Donald Trump, who has said the GOP should be willing to force default rather than give up the goal of reduced spending.
Other lawmakers weigh in
Members of Congress also appeared on the Sunday shows to warn about the consequences of default, and to blame the other guys for the impasse.
Sen. Chris Van Hollen, D-Md., speaking on ABC’s This Week, said Trump-like Republicans are trying to use the debt ceiling to extort unfair spending cuts from the Biden administration and other Republicans.
“What we have right now is Speaker McCarthy and MAGA House Republicans saying that they’re going to push the default detonator and blow up our economy if they don’t get their way on their budget proposals,” Van Hollen said. “That would destroy the American economy.”
Sen. Bill Cassidy, R-La., appearing on CNN’s “State of the Union,” said Biden needs to exercise leadership.
Cassidy, citing different estimates by different administration officials, also said it would be helpful to know when exactly the government might default.
“When,” he asked, “is the drop-dead date?”