WASHINGTON – The negotiations on the debt ceiling are set to continue for another week or possibly longer as the possibility of a government default looms closer next month.
President Joe Biden and House Speaker Kevin McCarthy have planned to meet again on Monday, aiming to find common ground after talks stalled over Republican demands for spending cuts as part of a debt ceiling increase deal.
McCarthy announced that he had a “productive” phone conversation with the president while Biden was returning from an economic summit in Japan on Sunday.
During the G-7 summit, Biden referred to the GOP’s demands as “extreme” and expressed concerns that they could lead to a default if they pursued outrageous measures. Meanwhile, McCarthy stated in an interview on Fox News that negotiations could not resume until Biden returned to the country, emphasizing that spending remains the primary Republican concern in the debt ceiling discussions.
The debt ceiling situation involves a complex political and economic battle with multiple factors at play:
Biden holds GOP responsible
Biden has raised the possibility of taking unilateral action to ensure the nation’s bills are paid but noted that there may not be enough time before the proposed June 1 deadline.
While citing the 14th Amendment of the U.S. Constitution, which asserts the validity of public debt, Biden also questioned the feasibility of such a maneuver within the limited timeframe. He highlighted the Republicans’ reluctance to consider raising taxes on the wealthy as a means to address the federal budget deficit.
Biden insists that Republicans must move away from their extreme positions in the debt ceiling negotiations.
The exact deadline remains uncertain.
Treasury Secretary Janet Yellen, appearing on NBC’s Meet The Press, stated that the actual deadline is uncertain, and while the government could potentially pay its bills beyond June 1, the window would be brief.
Yellen echoed warnings about the repercussions of a default, emphasizing that it would have severe consequences for global markets and likely trigger a recession. Yellen also stressed that a default would harm existing government programs, including Social Security, Medicare, and military pay.
Republicans blame Biden
During an appearance on Fox News’ Sunday Morning Futures, McCarthy said he would discuss the way forward with Biden. Negotiations between the White House and House Republicans broke off due to ongoing disputes.
McCarthy accused Biden of retreating on spending cuts under pressure from the more liberal members of his party. He tweeted that Biden would rather be the first president in history to default on the debt than risk upsetting the radical socialists who currently hold influence among Democrats.
Other lawmakers’ perspectives
Lawmakers also expressed their views on the Sunday shows, warning about the consequences of a default and blaming the opposing party for the impasse.
Sen. Chris Van Hollen, D-Md., speaking on ABC’s This Week, accused Trump-like Republicans of attempting to extort unfair spending cuts from the Biden administration and their Republican colleagues using the debt ceiling as leverage. Van Hollen emphasized that such actions would be detrimental to the American economy.
Sen. Bill Cassidy, R-La., appearing on CNN’s “State of the Union,” urged Biden to demonstrate leadership. Cassidy also pointed out the need to determine the precise date when the government might face default.
Overall, the debt ceiling negotiations remain in a state of uncertainty as the involved parties continue to navigate their differences while grappling with the approaching deadline.