Biden to continue US debt ceiling talks as McCarthy warns time is ‘very short’
Joe Biden will continue to hold talks with congressional leaders on raising the US debt limit later this week and will meet them again after the G7 summit in Japan, his press secretary said on Wednesday.
On Tuesday, the US president postponed plans to visit Papua New Guinea and Australia after the Japan summit, cutting short his Asia trip so he can return to Washington.
The same day, Biden and the Republican House speaker, Kevin McCarthy, met for an hour at the White House, a meeting the president said was productive.
Republicans want Biden to agree spending cuts in return for a bill to raise the US borrowing limit.
Democrats say Republicans should agree to a “clean” debt limit bill, the sort they repeatedly passed under Donald Trump, citing potentially catastrophic economic impacts should the US default.
The US treasury secretary, Janet Yellen, has indicated that without agreement, default could come as early as 1 June.
A failure to honour debts could have catastrophic impacts on the US and world economies.
On Wednesday morning, Karine Jean-Pierre told MSNBC: “The president is looking forward to having conversations with the congressional leaders on the phone and meeting with them again when he comes back from overseas.”
Multiple news outlets reported that Biden had agreed to a key demand from McCarthy: that negotiations be carried out by a small group of aides – removing, for now, Democratic leaders in the House and Senate.
On Wednesday, McCarthy told CNBC: “The challenge here is the president waited 104 days until he came to this conclusion. The timeline is very short.”
Politico said Biden was now represented by the White House counselor Steve Richetti, budget director Shalanda Young and legislative affairs director Louisa Terrell.
Garret Graves, a Louisiana Republican and McCarthy ally, was leading the Republican team.
McCarthy, who controls the House by just five seats, is widely seen to be at the mercy of the far right of the Republican caucus.
But according to Politico, Graves “isn’t a bomb-thrower or grandstander, and Democrats told us they’ve seen him as a steady hand in other bipartisan policy negotiations”.
Politico reported that the new negotiators “huddled on Capitol Hill last night to start negotiations, reflecting the time crunch as the clock ticks toward a possible 1 June default”.
Punchbowl News said the talks were “initial”, with “full-scale negotiations set to kick off” on Wednesday.
The negotiators, it said, had “a very difficult task ahead of them. They need to find a deal that can pass Congress in the next 15 days. To do that, they’ll have to come up with a framework over the next few days.
“This is a massive lift that will require deft negotiating, cooperation from all sides and incredible flexibility on behalf of our national political leadership. Basically everything that Congress hasn’t done at all this year and traditionally isn’t very good at.”
House Republicans are demanding $4.8tn in spending cuts, mostly to Democratic priorities including welfare and environment spending.
Demonstrating the political vice in which Biden finds himself, leading progressives have warned him not to give in.
“It’s really important we don’t give ground,” Pramila Jayapal, chair of the Congressional Progressive Caucus, told Axios. “We have made it clear ... that if they give on these core Democratic values, there will be a huge backlash.”
Hakeem Jeffries, the Democratic House minority leader, also spoke to CNBC on Wednesday.
“We can’t continue to find ourselves in this situation where there’s a flirtation with a default,” he said.
“It creates uncertainty that’s bad for the American people. It’s bad for the economy. That’s bad for business. And so our view has consistently been that any resolution of this matter has to be at least two years in nature. And that was a position that was once again made clear in the meeting yesterday.”
Punchbowl said: “If Democrats want to hike the debt limit until 2025, McCarthy is going to demand a lot in return.”
Jeffries insisted: “Our view is that if we’re going to have a thoughtful conversation about deficit reduction, that conversation can’t simply be one-sided, based on the rightwing ideological perspective of a handful of extreme Maga Republicans.
“That’s not how you make public policy.”
Source: The Guardian US
