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Biden, McCarthy impasse continues

Two agree to another debt limit meeting by Compiled by Democrat-Gazette staff from wire reports | May 10, 2023 at 5:32 a.m.
Senate Minority Leader Mitch McConnell of Ky., Speaker of the House Kevin McCarthy of Calif., and Senate Majority Leader Sen. Chuck Schumer of N.Y., listen as President Joe Biden speaks before a meeting to discuss the debt limit in the Oval Office of the White House, Tuesday, May 9, 2023, in Washington. (AP Photo/Evan Vucci)

WASHINGTON -- President Joe Biden and congressional leaders confronted each other on the debt limit impasse Tuesday, ending their meeting with no breakthrough but agreeing to meet again this week to try to avert the looming risk of an unprecedented government default.

Speaking at the White House, Biden described the talks as "productive," though House Speaker Kevin McCarthy said after the high-stakes Oval Office meeting he "didn't see any new movement" toward resolving the stalemate.

Lawmakers and their staffs were to continue discussions as soon as Tuesday evening on the annual federal budget at Biden's encouragement. Biden and the congressional leaders are to meet again Friday.

After the hourlong discussion in the Oval Office, Biden said he was "absolutely certain" that the country could avert a default, declaring that failure to meet America's obligations "is not an option." Still, time is short.

With the federal government expected to default on its debt as soon as June 1 without an agreement, McCarthy and his Republican caucus have refused to raise the debt ceiling without commitments to major spending cuts.

Biden has argued that Congress should simply raise the ceiling as it has for generations to pay for spending already approved.

"We should not have House Republicans manufacturing a crisis on something that has been done 78 times since 1960," White House press secretary Karine Jean-Pierre said Monday. "This is their constitutional duty. Congress must act. That's what the president is going to make very clear with the leaders tomorrow."

Republicans came to the White House hoping to negotiate sweeping cuts to federal spending in exchange for allowing new borrowing to avoid default. Biden, on the other hand, 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.

"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.

Outside the White House, McCarthy said, "I asked the president this simple question, 'Does he not believe there's any place we could find savings?'"

As the president welcomed McCarthy, House Democratic leader Hakeem Jeffries, Senate Majority Leader Chuck Schumer and Minority Leader Mitch McConnell, he had quipped to reporters, "We're going to get started, solve all the world's problems."

Biden described the meeting's tone as "very measured and low-key," adding, "occasionally there would be a little bit of an assertion that maybe was a little over the top from the speaker."

He especially took issue with McCarthy's branding as a lie the Democrats' assertion that the Republicans' budget restraints would hurt veterans.

Still, Biden added, "I trust Kevin will try to do what he says."

McConnell, who has let his House counterpart take the lead in negotiations and backed him up ahead of the White House meeting, 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 said there is room to "come together" on spending cuts as part of the budget process, but quickly jumped on McCarthy's refusal to 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.

McCarthy said Biden had directed their staffs to continue discussions, and that the leaders themselves would convene again in person on Friday at the White House.

While Biden ruled out default, he also all but dismissed trying to unilaterally prevent it, saying that he didn't believe invoking the 14th Amendment of the U.S. Constitution, which says the validity of the federal debt shall not be questioned, was a solution to the current impasse.

White House lawyers will pursue the idea further, he added, but "the problem is it would have to be litigated."

Before the White House meeting, McCarthy and Jean-Pierre insisted it would be simple to avert default -- if only the other side capitulated.

The chasm between these opposite postures had fomented uncertainty that is roiling financial markets and threatens to turn into a tidal wave that swamps the country's economy. Default, officials say, would have sweeping impacts, threatening to disrupt Social Security payments to retirees, destabilize global markets and tilt the nation into a potentially debilitating recession.

Last month, House Republicans passed a sweeping bill to slash spending, an opening offer in negotiations. But that legislation has no chance in the Democratic Senate, and the White House has threatened to veto it.

Republicans hope that bill would achieve $4.5 trillion in deficit savings through cuts in spending, eliminating tax breaks for investing in clean energy, and reversing Biden's plans to reduce the burdens of student loan debt.

Referring to the House bill, McCarthy said, "We both said default is not an option -- but only one of us took action."


Already looking past the meeting, Biden is set to go today to Westchester County, N.Y., 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 visit today will be to a congressional district won by Biden in 2020 but now represented by a Republican, Rep. Mike Lawler.

Because the House Republican bill does not specifically spell out which federal programs would be cut, Democrats have gone on offense, warning of steep hits to popular programs.

The Democratic-aligned group House Majority Forward announced a $1 million campaign Tuesday amplifying such cuts, while the House Republicans' campaign committee countered with its own effort portraying Democrats as "addicted to spending."

McCarthy said his caucus would take steps to increase funding for veterans despite their overall proposal. "First of all, cutting the veterans is a lie," he said.

While calling for a "clean" increase to the debt limit, Biden has said he is open to discussion about how to reduce the federal deficit. His budget plan would trim deficits by nearly $3 trillion over a decade, mainly through tax increases on the wealthy and changes such as letting the government negotiate over prescription drug prices.

In response to McCarthy's demand to claw back some unspent funds from his sweeping covid-19 relief package, Biden said he would "take a hard look" at doing so, independent of the talks to raise the debt limit.

"We don't need it all, but the question is what obligations were there made, commitments, made, money not dispersed, etc.," Biden said, adding: "It's on the table."

Biden added that the debt limit should be raised for "more than a year, so that we can move things along." The House GOP bill raised the possibility of another showdown over the government's borrowing authority in the heat of a presidential election next year.

While the financial markets have started to show some jitters, the business community has thus far largely avoided backing either side in the showdown and instead called for a deal to be struck.

"Securing a bipartisan path forward to raise the debt ceiling could not be more urgent," said Josh Bolten, the head of the Business Roundtable, a group that represents CEOs. "The cost of a default, or even the threat of a default, is simply too high."

The U.S. Chamber of Commerce suggested its own priorities for a swift deal Tuesday, saying "there are no two better places to start than permitting reform and an agreement on spending caps."

Biden's refusal to negotiate on the debt limit is informed by his first-hand experience in 2011, when he was Barack Obama's vice president and the administration made painful concessions to Republicans in an effort to avoid default. Biden has told aides it's an experience he refuses to repeat, not just for himself, but for future presidents.

Notably, though, the administration has not ruled out a short-term increase in the debt limit that would align the deadline to increase federal borrowing authority with the talks on government spending that must be resolved by Sept. 30.

Information for this article was contributed by Zeke Miller, Seung Min Kim, Josh Boak and Lisa Mascaro of The Associated Press and by Peter Baker and Jim Tankersley of The New York Times.

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