US PRESIDENT JOE Biden will meet with Republican House Speaker Kevin McCarthy tomorrow for another round of talks on raising the US debt ceiling less than two weeks before a key deadline to avoid default, officials said.
Anxiety was mounting in Washington today ahead of the 1 June deadline, set by the US Treasury, for Congress to authorize more borrowing, as the two sides appeared nowhere near a compromise.
Speaking at a press conference before leaving to return to Washington from the G7 summit in Hiroshima, Japan, Biden said Republicans’ latest demands for spending cuts as a condition for raising the US government borrowing authority were “frankly unacceptable.”
“It’s time for the other side to move from their extreme positions,” he said.
Biden spoke with McCarthy later from Air Force One as he flew home from Japan. The White House announced Biden would meet with McCarthy on Monday for face-to-face discussions.
For his part, McCarthy said his position remained unchanged.
“Washington cannot continue to spend money we do not have at the expense of children and grandchildren,” he said on Twitter after talking to Biden.
In his comments in Japan Biden voiced hope that “we can reach an agreement.” However, he cautioned that he could not “guarantee that they wouldn’t force a default by doing something outrageous.”
Biden said that he was looking into an obscure constitutional clause in the 14th Amendment, which states that the validity of public debt “shall not be questioned” – and potentially authorizing the president to circumvent Congress and raise the debt ceiling himself.
“I think we have the authority. The question is could it be done and invoked in time,” he said, noting the likelihood of legal challenges to this and the rapidly approaching debt deadline.
The Treasury Department says that the government could run out of money and default on its $31 trillion debt as early as 1 June if Congress, where Republicans control the House of Representatives, does not authorize more borrowing.
US Treasury Janet Yellen said today on NBC that 1 June remains a “hard deadline.”
She said, “my assessment is that the odds of reaching 15 June, while being able to pay all of our bills, is quite low.”
Yellen echoed Biden’s comments that invoking the 14th amendment was an unattractive option, citing the legal uncertainty and tight timeframe.
Biden had planned to travel from Japan to Papua New Guinea and Australia but cut short the Asia trip due to the debt talks.
This added to the impression that he limped into the G7 summit as a weakened leader of a divided country stumbling from one crisis to the next as the world looked on in dismay.
But national security adviser Jake Sullivan dismissed this idea, saying on CNN that Biden had led allies at the G7 summit in dealing with China, the war in Ukraine, the environment and other issues.
“President Biden has been able to lead on the world stage and at the same time stay engaged to ensure that the United States does not default,” Sullivan said.
The debt ceiling raise is usually an uncontroversial annual procedure but this year the increasingly hard-right Republican Party has turned the threat of default into a powerful lever to try and force Biden to accept spending cuts. Biden accuses his opponents of putting the US economy at risk for political point scoring.
More borrowing is required imminently by the US government just to meet expenditures already agreed to in the current budget.
Failure to strike a deal to lift the debt ceiling would leave Washington unable to pay its bills and trigger an array of economic shock waves worldwide — including, the White House says, a US recession.
With the 2024 election campaign underway and Biden potentially facing Trump again, Republicans have seized the opportunity to paint the Democrats as responsible for the country’s gargantuan debt — which in reality has built up over decades.
Republicans say the debt ceiling can no longer be raised without harsh measures to reduce the deficit. These include slashing social spending and restricting access to Medicaid, the subsidized program providing health care for the poor.
Biden has countered with a plan to reduce some spending but also to raise new revenue by increasing taxes on the richest Americans and corporations which currently enjoy huge tax breaks. Republicans are refusing to accept any tax increase as part of a deal.
“That’s what we continue to have a significant disagreement on, on the revenue side,” Biden said in his press conference.
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