Washington.- President Joe Biden and congressional Republicans are still far from resolving the impending crisis of default in the United States, but it is still possible to reach an agreement by the weekend, declared the speaker of the House of Representatives of the Republican Party Chairman Kevin McCarthy after an Oval Office meeting Tuesday with Biden and other Democratic leaders.
Meanwhile, Biden is cutting a big trip abroad short due to the urgency of the talks. She will still attend a Group of Seven summit in Japan this week, but will then rush home instead of going to Australia and Papua New Guinea as planned.
For all the talk of a terrible debt limit outcome, there was paramount agreement after the White House meeting that the first default in US history must be avoided.
“Number one, we know we’re not going to stop paying,” said Senate Republican Leader Mitch McConnell. But he added: “We are running out of time.”
Democratic Senate Majority Leader Chuck Schumer said: “Hopefully we can reach an agreement… Default is simply the worst alternative.”
McCarthy said an important development from the meeting was that the president had “changed the scope” of who is negotiating in talks that have been slow for the past week.
Now, Steve Ricchetti, counselor to the president, and Shalanda Young, director of the Office of Management and Budget, will try to negotiate a deal directly with McCarthy’s team.
The speaker said he tasked Rep. Garrett Graves, R-Los Angeles, the speaker’s point man on debt and budget, with the talks with the White House team.
“Now we have a format, a structure,” McCarthy said as he returned to the Capitol. A readout of the White House meeting said Biden was directing his staff to “continue to meet daily on outstanding issues” in the talks and that he would be reaching out to leaders by phone later this week.
Yesterday’s meeting was critical, as negotiators have a June 1 deadline, which is when the Treasury Department says the United States could start defaulting on its debts for the first time in history.
travel only to japan
Biden will travel to Japan on Wednesday but will cancel subsequent stops, the White House said.
National Security Council spokesman John Kirby said Biden will already have met with some of the leaders of the so-called “Quad,” the purpose of the Australian leg of the visit, while in Japan.
“We wouldn’t even have this discussion about the effect of the debt ceiling debate on the trip, if Congress did its job, raising the debt ceiling like it always has,” Kirby said.
Biden seemed optimistic that “we’ll be able to do this” as the White House meeting began. Others in the Oval Office — Vice President Kamala Harris, McCarthy, Schumer, McConnell and House Minority Leader Hakeem Jeffries — sat down earnestly.
McCarthy has been much more pessimistic than Biden on the state of the talks. He and other Republicans are demanding big budget cuts in exchange for their support for raising the debt ceiling. Biden insists that the two issues should not be linked.
“How much is too much?” McCarthy spoke of the nation’s $31 trillion debt burden, while pushing for tougher work requirements for government aid recipients as a way to reduce spending.
Even as the Democratic president and the Republican speaker discuss the politics of the issue, with Biden insisting he is not negotiating on the debt ceiling and McCarthy working for spending cuts, several areas of possible agreement seemed to be emerging.
In the table
Among the items on the table: recovering some $30 billion in untapped COVID-19 money, imposing future budget caps, changing permitting regulations to make energy development easier, and imposing strengthened work requirements on recipients of government aid, according to people familiar with the talks.
But congressional Democrats are increasingly concerned about the idea of setting new job requirements for government aid recipients after Biden suggested he might be open to such changes.
The White House remains opposed to changes to eligibility for recipients of Medicaid and food stamp programs, though it is more open to revisions for recipients of the Temporary Assistance for Needy Families cash assistance program.
The idea of imposing more job requirements was “strongly” rejected by House Democrats in a morning caucus meeting, according to a Democrat in the private meeting and was granted anonymity to discuss it.
Progressive lawmakers in particular have raised the issue. Rep. Pramila Jayapal, chair of the Congressional Progressive Caucus, said: “We want to make sure that these negotiations don’t include spending cuts, job requirements, things that would hurt people, people in rural areas, black, brown, indigenous.”
Democratic leader Jeffries’ staff tried to assuage concerns Monday night, while a separate group of more centrist Democrats have signaled to his moderate Republican caucus that they are prepared to work on something to reach a debt ceiling deal. , attendees said Tuesday.
While McCarthy complained that talks are moving slowly and said he first met with Biden more than 100 days ago, Biden said it took McCarthy all this time to come up with his own proposal after Republicans failed to produce their own. budget this year.
Adding to the pressure on Washington to reach a deal, Treasury Secretary Janet Yellen said Monday that estimates for the possible “X-date” by which the United States could run out of cash have not changed.
But Yellen, in a letter to the House and Senate, left some opening for a possible extension of time in the event of a national default, stating that “the actual date Treasury exhausts extraordinary measures could be several days or weeks later.” than these estimates.
“It is essential that Congress act as soon as possible,” Yellen said Tuesday in remarks to the Independent Community Bankers of America.
“In my assessment, and that of economists in general, a US default would create an economic and financial catastrophe,” he said.
Time is running out. Congress has only a few days when both the House and the Senate are in session to pass legislation.
McCarthy-led Republicans want Biden to agree to their proposal to cut spending, cap future outlays and make other policy changes to the package approved last month by House Republicans. McCarthy says that the House of Representatives is the only house that has taken steps to raise the debt ceiling. But the House bill is almost certain to fail in the Democratic-controlled Senate, and Biden has said he would veto it.
An increase in the debt limit would not authorize new federal spending. It would only allow borrowing to pay for what Congress has already approved.
