Speaking at the White House, Biden called the talks “productive,” though House Speaker Kevin McCarthy said after the Oval Office meeting that he “sees no new movement” to exit. deadlock, notes the Associated Press. Biden and congressional leaders are scheduled to meet again on Friday.
When the President greeted McCarthy, Democratic House Leader Hakim Jeffreys, Senate Majority Leader Chuck Schumer and Minority Leader Mitch McConnell, he joked to reporters, “We’re going to start, solve all the problems of the world”. Biden later described the tone of the meeting as “very measured and restrained,” adding, “At times you could hear a little assertiveness that might have been a little over the top from the speaker.” After an hour-long discussion in the Oval Office, the White House chief said he was “absolutely confident” the country could prevent a default, saying America’s default was “not a option”. He particularly took issue with McCarthy calling a lie the Democrats’ claim that Republican budget cuts would hurt veterans. At the same time, McCarthy himself, according to Fox News, drew reporters’ attention to the fact that he did not call Biden himself a “liar.”
The US government, experts say, is sitting within the legal borrowing limit and won’t be able to pay all of its bills by June 1 unless Congress agrees to raise the debt ceiling. Speaking on ABC on Sunday, US Treasury Secretary Janet Yellen warned bluntly that authorities should not go so far as “that we have to consider whether the president can continue to issue debt.” “It will be a constitutional crisis,” said the minister. Yellen didn’t explicitly say the idea wasn’t being considered, but called it “one of the worst options” if Congress doesn’t act.
This failure will lead the country to default with far-reaching economic consequences, both domestically and internationally. A default will lead to higher interest rates, potential job losses, a likely stock market crash and delayed social security payments, among other consequences, notes The Hill. The default also threatens to destabilize global markets and drive America into a potentially debilitating recession, officials say. Ahead of the meeting at the White House, McCarthy and White House press secretary Karine Jean-Pierre insisted it would be easy to prevent a default if only the other side capitulated. The chasm between these opposing positions has created uncertainty that has rocked financial markets and threatens to turn into a tidal wave that has swept through the country’s economy.
Republicans came to the White House hoping to negotiate a sharp cut in federal spending in exchange for allowing new loans to avoid a default. Biden, on the other hand, stepped up his opposition to the full confidence and credit of the “hostage” country in the negotiations, while reaffirming his willingness to negotiate the budget only after default is no longer a threat. “I have told congressional leaders that I am ready to start a separate discussion on my budget, my spending priorities, but not under threat of default,” Biden said.
While Biden has ruled out a default, he has also dismissed attempts to unilaterally prevent one. He said he does not believe appealing to the 14th Amendment to the US Constitution, which states that the legitimacy of federal debt should not be questioned, is the solution to the current impasse. He added that White House lawyers will develop this idea, but “the problem is that it will have to be challenged”.
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