On Monday, President Joe Biden and Republican House Speaker Kevin McCarthy met at the White House to discuss raising the US government’s debt ceiling and preventing a default, but did not yet been able to agree on a compromise.
Before the meeting began, Biden said he was “optimistic” that progress could be made. According to the president, the two parties need a bipartisan agreement to explain to their voters the nature of the concessions.
At the same time, Biden noted the main disagreement with Republicans over cutting budget spending. “Here’s the disagreement: I think we should look at tax loopholes and make sure the wealthy pay their fair share (of taxes),” Biden said. He reiterated that he was against additional taxes for Americans earning less than $400,000 a year.
After an hour and a half of meeting in the Oval Office, Kevin McCarthy told reporters that “there was a productive discussion. But we don’t have an agreement yet.” McCarthy said negotiations were ongoing and added, “I think we can still come to an agreement.”
Biden also called the meeting “productive.” “We reaffirmed that default is out of the question and the only way forward is to seek a bipartisan agreement in good faith,” Biden said in a statement after the meeting.
The Biden administration and Republicans in the House of Representatives have just 10 days to reach an agreement by June 1.
Treasury Secretary Janet Yellen wrote another official letter to Republicans in Congress on Monday stating that there is very little time left for a compromise, that the earliest possible default date remains June 1 and that it is “very likely” that the Treasury will no longer be able to pay all government bonds by early June if the debt ceiling is not raised.
“From past crises of raising the debt ceiling, we know that waiting until the last minute to suspend or raise the debt ceiling can seriously damage business and consumer confidence, increase the cost of borrowing short term for taxpayers and negatively impact the credit rating of the United States.” , – says the letter from the head of the US Treasury.
On Monday, the Biden administration’s negotiating team spent two hours on Capitol Hill discussing details of the deal with Republican negotiators.
Any deal to raise the US debt ceiling must be approved by both houses of Congress and therefore subject to bipartisan support. Republicans control the House of Representatives 222-213 and Democrats control the Senate 51-49.
It will take several days to push the bill through Congress if Biden and Republicans in the House of Representatives reach an agreement.
McCarthy believes a deal should be reached this week to be passed by Congress and signed by Biden in time to avoid a default.
Republicans, in exchange for an increase in the debt ceiling, want a serious cut in US budget spending on aid items for low-income Americans. One of the Republicans’ requirements is that applicants for certain state aid programs must be working. Republicans are also demanding the return of aid approved by Congress to overcome the consequences of COVID-19, but not yet spent.
Democrats want to keep budget spending at this year’s level, while Republicans are demanding a return to spending levels in 2022.
The plan, passed by the House of Representatives last month, calls for an 8% cut in public spending next year.
President Biden, who has made the economy a centerpiece of his administration’s policies and is seeking re-election in 2024, said he would consider spending cuts as well as tax adjustments. Republicans call them “unacceptable.”
Biden previously tweeted that he would not support “big oil” subsidies and “wealthy tax scams,” putting health care and food aid for millions of Americans at risk.
On May 2, US Treasury Secretary Janet Yellen informed Congress that the United States could default on its debt as early as June 1 unless lawmakers raise or suspend the US debt ceiling. here this date. Joe Biden on the same day urged Congress to take action to avoid an unconditional default.
On April 26, the House of Representatives passed a bill to raise the national debt ceiling, but the bill contains provisions for a sharp reduction in health insurance coverage for socially disadvantaged groups, a reduction in tax credits for solar energy and an overall reduction in expenses. by about $4.5 trillion, or 22%, in exchange for a $1.5 trillion increase in the US debt ceiling.
The bill has no chance of being approved by the Democratic-controlled Senate. The White House also said Biden would veto the legislation if it passes.
After the $31.4 trillion debt ceiling was hit on Jan. 19, Yellen told Congress that the Treasury would support debt payments, federal benefits and other spending through relief measures. cash management emergency.
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