Biden: Debt default ‘not an option’
Lawmakers, staffs working on way to iron out differences
WASHINGTON — President Joe Biden said he and congressional leaders had a “productive” meeting Tuesday on trying to raise the nation’s debt limit though no agreement was reached, and they will meet again Friday to try to avert the risk in weeks of an unprecedented government default.
Speaking at the White House, Biden declared, “Default is not an option.”
Lawmakers and their staffs held meetings Tuesday night on government spending, as Biden said he was willing to engage in debate on lowering the deficit, but only if the government’s full faith and credit was assured.
“I told congressional leaders that I’m prepared to begin a separate discussion about my budget, spending priorities, but not under the threat of default,” Biden said.
But House Speaker Kevin McCarthy said after the high-stakes Oval Office meeting that he “didn’t see any new movement” toward resolving the stalemate.
With the government at risk of being unable to meet its obligations as soon as June 1, raising the specter of economic chaos, Republicans came to the White House hoping to negotiate sweeping cuts to federal spending in exchange for allowing new borrowing to avoid default.
“I asked the president this simple question: Does he not believe there’s any place we
could find savings,” McCarthy told reporters outside the White House.
Biden reinforced his opposition to allowing the country’s full faith and credit to be held “hostage” to negotiations — while affirming his willingness to hold talks on the budget only after default is no longer a threat.
Biden welcomed McCarthy, House Minority Leader Hakeem Jeffries, Senate Majority Leader Chuck Schumer and Minority Leader Mitch McConnell in the Oval Office for just over an hour.
There seemed to be at least a bit of daylight between McConnell, who has let his House counterpart
take the lead in negotiations and backed him up ahead of the White House meeting, and McCarthy.
The Senate leader categorically said, “The United States is not going to default. It never has and it never will.”
The speaker, though, simply said, “I’ve done everything in my power to make sure we will not default.”
Democrats quickly jumped on McCarthy’s refusal to categorically rule out the possibility of default, with Schumer saying the Republican is “greatly endangering America.”
“To use the risk of default, with all the dangers that has for the American people as a
hostage and say it’s my way or no way, or mostly my way or no way, is dangerous,” Schumer said.
Before the White House meeting, McCarthy and White House press secretary Karine Jean-Pierre insisted it would be simple to avert default — if only the other side capitulated. The chasm between these opposite postures is fomenting uncertainty that is roiling financial markets and threatens to turn into a tidal wave that swamps the economy. The meeting was timed to begin after financial markets closed for the day.
McCarthy said Tuesday that a deal is needed by next week if Washington is to meet the June 1 deadline,
and he said he saw no reason why both sides couldn’t come to an agreement quickly over Republican ideas for cutting spending in exchange for raising the debt limit.
“I don’t think it’s that difficult,” McCarthy said.
Biden and the Democrats don’t see it that way. The president is insisting that raising the debt limit is nonnegotiable, with spending restraints addressed separately as part of the annual budget process.
House Republicans recently passed a sweeping bill to slash spending, an opening offer in negotiations. But that legislation has no chance in the Democratic Senate, and Biden said
Tuesday that it was “dead on arrival.”
Default, officials say, would disrupt Social Security payments to retirees, destabilize global markets and tilt the nation into a potentially debilitating recession.
Treasury Secretary Janet Yellen acknowledged the “very big gap” between Democrats and Republicans in an interview Monday with CNBC. Biden, she said, was not willing to discuss compromises with “a gun to the head of the American people and the American economy.”
Already looking past the meeting, Biden on Wednesday is to go to Westchester County, New York, where he plans to deliver a speech on how proposed spending cuts approved by House Republicans could hurt teachers, older adults needing food aid and veterans seeking health care.
It’s part of a broader campaign by Biden to try to paint the Republican cuts as draconian. Aides believe that message both strengthens his position in talks with the GOP and boosts his nascent 2024 reelection effort.
His Wednesday visit will be to a congressional district won by Biden in 2020, but that is now represented by a Republican, Rep. Mike Lawler.
Though Biden is traveling to the area to lambaste House Republicans, Lawler said Tuesday that he accepted the invite from the White House — “maybe to their surprise” — to appear alongside the president at Westchester Community College.
“He’s coming to my district, specifically to talk about the most pressing issue,” Lawler said.