WASHINGTON (AP) — President Joe Biden on Monday sought to ease the debt ceiling impasse by inviting four congressional leaders to the White House on May 9 — signaling growing fears that the federal government may soon be unable to pay its bills. As of June 1.
Administration and congressional officials confirmed personal calls to lawmakers and the date of the meeting, insisting on anonymity to discuss the plans. Sen. Minority Leader Mitch McConnell, R-Ky., said he had spoken with Biden and hoped to speak with him again, though he did not say whether he would attend the meeting.
Biden urges Congress to act to avoid a default without conditions, to discuss the urgency of preventing default and how to begin a separate process to pass a separate fiscal year 2024 budget. But even if lawmakers speak up, progress is not guaranteed on an issue that has exposed a gulf in how Democrats and Republicans think the country should be governed.
Biden and House Speaker Kevin McCarthy, R-Calif., are deadlocked on repealing the government’s borrowing authority. The president has called for a clean increase To the tune of $31.4 trillion, McCarthy and GOP lawmakers passed a bill calling for spending cuts at the same time. Last week with $4.8 trillion in deficit savings over 10 years.
McCarthy has invited Biden to engage in negotiations. But shortly after noon Monday, the president said in a speech that the GOP congressional leader must first promise the U.S. government will not default. House Republicans passed a bill last week that could set up another showdown in that year’s presidential election in exchange for raising the debt ceiling by $1.5 trillion over the next decade or until March 31, 2024.
The impasse began after Treasury Secretary Janet Yellen warned in a letter Monday afternoon, “We cannot continue to meet all of the government’s obligations in early June, and before June 1, unless Congress raises or suspends the debt ceiling.”
Economists have warned of a financial catastrophe if the world’s biggest economy defaults on its payments. A default could plunge the U.S. and other countries into a deep recession, while making it difficult to restore U.S. financial credibility.
McCarthy made no mention of an exit from Biden, but insisted that “the clock is ticking” after the Treasury update on Monday.
“House Republicans did their job and passed a responsible bill that raises the debt ceiling, avoids default and tackles reckless spending,” McCarthy said in a statement. “The Senate and the President need to act — and soon.”
It’s not yet clear how the president and Congress can resolve the issue, but Democratic leaders want to cut the debt ceiling from the budget process.
Senate Majority Leader Chuck Schumer, D-N.Y., and House Minority Leader Hakeem Jeffries, D-N.Y., quickly seized on Yellen’s letter as a reason to address the debt ceiling and resolve differences in spending, “as part of our annual budget process, which is currently underway.”
“Now is the time to do what is right and necessary for the American people to avoid a first mistake by the U.S. government that could plunge the stock market, raise costs on families and hurt retirement savings,” the lawmakers said in a statement. .
Late Monday, Schumer opened the Senate process to consider both a clean debt ceiling bill that would suspend the limit for two years, as well as a House Republican package that his office said could be used in future budget negotiations.
Senate. Mitt Romney, R-Utah, said the Obama presidency set a precedent for negotiating a debt ceiling increase. Make a deal, don’t scare the pants off the American people.
In a White House speech celebrating small businesses before Yellen’s letter, Biden portrayed the House Republicans’ plan as an attempt to wrest spending cuts from the administration by putting the federal government at risk of default. Loyal to the “Make America Great Again” movement started by former President Donald Trump, he portrayed some of the bill’s supporters as irrational extremists.
“We’re paying our bills, and we need to do so without reckless hostage-taking from some MAGA Republicans in Congress,” Biden said.
White House officials estimate that the House GOP bill would require a 22% cut in non-defense discretionary spending, putting millions of American families at risk for housing vouchers, food assistance and basic health care. Biden on Monday cited a Moody’s Analytics report that said the bill would result in 780,000 fewer jobs next year if it becomes law.
But the House passed a bill with spending limits that avoided specific cuts. Instead, it would put strict limits on how much the federal government can spend over the next decade and leave lawmakers to sort out the details.
In exchange for raising the debt ceiling by $1.5 trillion by 2024, House Republicans narrowly voted to keep the levels and a 1% limit on growth going forward.
Republicans insist the defense and veterans accounts will be saved, though the bill does not explicitly mention actual cuts. Veterans Affairs Committee Chairman Mike Post, R-Ill., said he was “very, very disappointed” by the Biden administration’s suggestion that services be cut. “No player will miss out on the benefits,” Post assured on a weekend conference call.
Speaking from Jerusalem on Monday, McCarthy said the need to start negotiations was legitimate and that Biden’s resistance to doing so was the problem. The Speaker of the House suggested that children who watch the educational cartoon “Schoolhouse Rock” should learn that laws are made only because Congress and the president work together.
“‘Schoolhouse Rock’ — they never told you not to negotiate,” McCarthy said. “They asked you to work together.”
A deal hinges on a commitment to curb debt that already exceeds $31.4 trillion, the spokesman said. But both Biden and McCarthy have pledged to protect Social Security and Medicare, which will be primary drivers of the debt for decades to come, according to economists and the nonpartisan Congressional Budget Office.
McCarthy said he was looking forward to Biden “changing his mind and negotiating with us.”
By the end of the day, there was a meeting on the calendar.
White House correspondent Zeke Miller and AP reporter Kevin Freaking contributed to this report.
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