Debt Ceiling Battle Looms between Biden and McCarthy
President Joe Biden and new Republican House Speaker Kevin McCarthy will meet at the White House on Wednesday to discuss the US debt standoff – but they are so far apart that they can’t even agree on how to describe their meeting.
The stability of the US economy is at stake.
Debt Ceiling Battle Looms between Biden and McCarthy. Republicans are threatening to veto the usually rubber-stamp approval for raising the nation’s credit limit unless Democrats agree to steep future budget cuts first.
Meanwhile, the White House accuses Republicans of holding the economy “hostage” in order to extract politically motivated budget concessions.
If the debt ceiling is not raised by June, the US will be forced to default on its $31.4 trillion debt, a historic first that would leave the government unable to pay bills, undermine the US economy’s reputation, and likely panic investors.
McCarthy stated in a tweet on Tuesday that he will “negotiate for the American people.”
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When it comes to the debt ceiling, Biden, on the other hand, does not want to hear the word negotiation.
“The president firmly believes there should be no negotiation on this,” said John Kirby, Biden’s national security spokesman, on Tuesday.
Other clashes have occurred in the past when Republicans refused to allow the US debt to continue to rise.
However, on the majority of occasions, the disagreement was quickly resolved, Congress extended the ceiling, and the economy continued to function normally.
Things may be different this time because the political temperature is so high.
Biden, who is two years into his first term, is widely expected to announce his candidacy for a second term in the 2024 election.
And Republicans, who have recently taken control of the House, are eager to demonstrate their power.
Even if McCarthy is willing to compromise, his power in Congress is almost entirely dependent on the desires of a far-right group of Republicans who are more likely to play chicken, regardless of the global financial consequences.
Budget nitty gritty
The White House has stated that the current debt ceiling will not be included in any future government spending negotiations because the $31.4 trillion has already been agreed to by Congress. In other words, refusing to raise the debt ceiling is equivalent to refusing to pay an existing credit card bill.
There may be room for bargaining on future budget changes.
McCarthy’s stated goal is to address “runaway spending.”
But, when it comes down to it, neither party can say where they can find significant savings unless they go after the politically untouchable Social Security, Medicare, Medicaid, or other government-subsidized healthcare.
Biden is signaling that he intends to call McCarthy’s bluff by demanding that the Republicans lay out exactly where they intend to cut.
In a memo issued Tuesday, National Economic Council Director Brian Deese and Office of Management and Budget Director Shalanda Young challenged McCarthy to release a draft budget.
According to reports, the White House will issue its own on March 9.
This is “so the American people can see how House Republicans intend to reduce the deficit,” according to two senior Biden aides.
McCarthy previously stated that he is “not interested in political games.”
However, in remarks to supporters on Tuesday, Biden described McCarthy as a “decent man” who had become beholden to his far right after an embarrassingly long battle to win the House speakership.
“He had to make commitments that are absolutely out of the ordinary for a House speaker to make in order to become the leader,” Biden said.
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