And the two parties have only ten days to reach an agreement and allow the United States to continue paying what it owes.
“My position has not changed. Washington cannot continue to spend money we don’t have. We will meet tomorrow in person to continue negotiations,” the Republican House Speaker wrote on Twitter afterward. a phone call with the Democratic president. The White House was quick to confirm this information.
Biden warned in a tweet that he would reject a deal that “protects billions of dollars in subsidies for big oil companies and puts the health care of 21 million Americans at risk, or protects the wealthy from tax evasion and jeopardizes food aid for one million Americans.
And he pointed out in a subsequent tweet he made on his return trip to Washington from Japan, where he attended the G7 summit, that “the United States has never failed to pay its debts. That will never happen”.
In a brief statement he made later on Sunday, McCarthy referred to constructive communication between the two parties.
Commenting on the phone call with Biden, McCarthy said, “I think it was a constructive phone call.”
Almost all major economies have relied on credit for decades.
America has repeatedly raised the debt ceiling, which is the country’s maximum level of indebtedness, and that is the prerogative of Congress.
However, Republicans are refusing to back Biden this year, pointing out that it means giving the US president a blank check.
Earlier on Sunday, Biden told reporters at the end of the Group of Seven summit that recent Republican demands for spending cuts as a condition for raising the US government’s debt ceiling are “frankly unacceptable.”
The US President added: “Now is the time for the other side to abandon its extremist positions.”
Biden has also indicated that he is considering using a constitutional mechanism to avoid US default.
He continued, “I can’t guarantee they won’t fabricate a defect,” pointing out, “I’m studying Section 14 of the US Constitution to see if we have the legal authority” to circumvent Congress.
And Article 14, added to the US Constitution in 1868, states that “the validity of the public debt of the United States authorized by law shall not be questioned”. In other words, expenditures approved by vote must be respected.
And the Treasury Department has warned of dire consequences if the state runs out of money to pay its dues, rendering it unable to pay federal employees and potentially leading to higher interest rates with ripple effects. on businesses, mortgages and global markets.
In this regard, US Treasury Secretary Janet Yellen told NBC on Sunday: “My estimate is that the chances of reaching June 15 and being able to pay all our bills are very low.”
Cut spending in exchange for raising the debt ceiling
The Democratic administration and the Republican opposition are racing against time to prevent the United States from defaulting on its obligations after June 1.
Republicans are demanding that Biden agree to a significant reduction in budget spending in exchange for their agreement to raise the debt ceiling, while Democrats accuse them of using tactics to advance their political agenda, endangering the American economy .
While raising the debt ceiling is generally a routine process, it has become a point of contention in recent years with Republican lawmakers seeking spending cuts in return for raising the ceiling.
Talks reached an impasse on Saturday night in Washington, with the two sides trading accusations.
And White House spokeswoman Karen Jean-Pierre confirmed in a statement that recent Republican demands are “a big step backwards and include a set of extremist political demands that cannot be endorsed by the House of Representatives.” and the Senate”.
She pointed out that McCarthy is under pressure from the pro-Donald Trump streak in his Republican Party, which “threatens our nation to default for the first time in our history unless extremist partisan demands are met.”
McCarthy tweeted on Saturday that the White House was “backtracking.”
He added, “Unfortunately, the socialist wing of the Democratic Party seems to be in charge, especially with President Biden out of the country.”
On Friday, the Republicans left the talks table briefly, and after their resumption, Jean-Pierre said he was “optimistic”.
On Saturday, Biden stressed his optimism that a solution could be reached, telling reporters, “I still believe we can avoid default.”
For its part, the Biden administration is proposing spending cuts while raising taxes on the wealthiest and corporations that benefit from deep tax cuts.
But Republicans don’t want to raise taxes.
“On this point we have big differences in terms of income,” the president said on Sunday.
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