Biden and McCarthy preparing to discuss national debt
2023.01.31 14:17
Biden and McCarthy preparing to discuss national debt
By Tiffany Smith
Budrigannews.com – On Tuesday, both sides indicated that neither House Speaker Kevin McCarthy nor President Joe Biden of the United States will bring any specific plans to prevent a default to their first meeting regarding raising the debt ceiling.
The beginning of months of back-and-forth negotiations regarding increasing the $31.4 billion borrowing cap for the United States is likely to be the Wednesday meeting between Biden and McCarthy.
However, neither side is indicating that it is ready to negotiate on anything at this time.
A U.S. debt default could occur as early as June if no agreement is reached.
According to a White House memo seen by Reuters, Biden will ask McCarthy to present a budget plan and pledge to support the nation’s debt obligations during the meeting.
“There is no negotiation when the debt ceiling is raised; Shalanda Young, director of the Office of Management and Budget, and economic adviser Brian Deese wrote, “It is an obligation of this country and its leaders to avoid economic chaos.”
For his part, McCarthy stated that Biden must be willing to make concessions in order to obtain a debt ceiling increase from Congress.
McCarthy told reporters in the U.S. Capitol, “The first thing they should do, especially as the President of the United States, (is) say he’s willing to sit down and find a common ground and negotiate together.”
Although they have not provided any specifics, Republicans in the House of Representatives have stated that any increase in the debt ceiling should be accompanied by significant spending reductions. The two largest government benefit programs, Social Security and Medicare, have been ruled out by McCarthy.
According to the White House, cutting future spending won’t be discussed until the debt ceiling is raised.
Biden told reporters on Monday, when he was asked what his message would be for McCarthy: I’ll show you my budget if you show me yours.”
It’s possible that detailed proposals won’t appear for several weeks.
The White House has stated that its budget proposal will be made public on March 9. In the meantime, House Republican Leader Steve Scalise stated that the goal for the Republicans in the House is to present their budget proposal in April.
Scalise stated at a news conference:
“I hope the president meets his deadline just like we’re going to work to meet our deadline.”
The White House has used the lack of agreement to highlight fringe Republican proposals, such as one that reduces Social Security retirement benefits and one that eliminates the Internal Revenue Service in favor of a higher sales tax.
The United States of America, in contrast to the majority of other developed nations, has a firm limit on the amount it can borrow, and Congress must periodically raise that limit because the United States government spends more money than it receives.
Although Republicans have previously used their influence to achieve spending cuts, the debt ceiling increase is typically approved by a bipartisan vote.
The nation was on the verge of default when Democratic President Barack Obama and House Republicans clashed in 2011 and led to the first-ever downgrade of the nation’s excellent credit rating.
That conflict’s veterans warn that the politics and math are harder this time around, making it harder to find a solution before or after the government runs out of money.
Neil Bradley, a former aide to the House Republican leadership who is now a top official at the U.S. Chamber of Commerce, stated, “I think that the possibility of miscalculation runs higher today than it did in 2011.”
If the United States defaults, the conflict over the country’s growing debt has the potential to wreak havoc on the global economy.
After reaching the $31.4 trillion borrowing limit earlier in January, the Treasury Department has already begun taking “extraordinary measures” to prevent a default until summer.
