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Follow us live Biden and debt ceiling negotiations.
With time running out for a deal to raise the debt ceiling, President Biden and congressional leaders took a stand at the White House on Tuesday to avoid a default that could cost economists jobs and default on debt. We will have important face-to-face negotiations. recession.
At the meeting, Treasury Secretary Janet L. Yellen said that by June 1, the U.S. could run out of money for payments unless Congress raises or suspends the debt ceiling, the statutory ceiling on debt. Repeated next day at 3:00 pm. That’s all the government can borrow to meet its obligations.
Yellen warned on Tuesday that she would face an “economic and financial catastrophe” if the U.S. defaulted, and said the dispute over the debt ceiling was already affecting financial markets and households.
“The impact of the brinkmanship policy is already visible,” Yellen said in a speech at the Summit of America’s Independent Community Bankers.
Families and businesses are being forced to consider the possibility of default as part of their financial planning, he said, with investors set to mature in early June when U.S. funds could start to run out. He said he was cautious about continuing to hold government bonds.
Republicans have said they want to cut federal spending in exchange for raising the debt ceiling, a position Chairman Kevin McCarthy reiterated before Tuesday’s meeting.
“I agree to limit, save and grow,” he said, referring to a plan passed by the House of Representatives last month to cut spending in exchange for a higher borrowing limit. “We can raise the debt ceiling if we limit future spending.”
The president has said he is open to individual negotiations on future spending, but has insisted Congress must raise the cap unconditionally to avoid an economic disaster.
The White House was cautiously optimistic about a possible deal last weekend, but on Monday McCarthy voiced his doubts.
“I don’t think we are in a good position,” he said of the talks. “I know it’s not.”
The Speaker of the House told reporters in the Capitol on Tuesday that any deal would require tougher working conditions for safety-net programs such as food stamps, and Biden responded to the proposal over the weekend with some He took a tolerant stance, but declared progressives unacceptable.
“Remember what we’re talking about: able-bodied people with no dependents,” McCarthy said. “It helps people get jobs, but what does it mean for people to get jobs? They get paid better.”
Both sides have privately hinted that Tuesday’s session will be the moment that will make the difference between winning and losing negotiations, far more important than a similar high-level meeting held at the White House a week ago, with days remaining in Congress. is more urgent given the Weakened ability to act.
Democrats are awaiting Congressional results to decide how aggressively they will pursue an emergency plan they have been preparing for months to evade opposition from Republican leaders and force a vote on the debt ceiling. said.
They could start collecting signatures as early as Tuesday for a special expulsion petition that would automatically encourage such a vote if it wins the support of a majority of members of the House of Representatives. Democrats would need at least five Republicans to join them to reach the required threshold of 218, and it would be extremely difficult to get Democrats to support them unless the crisis was at its peak.
Lawmakers also acknowledged increasing talk of Biden invoking the 14th Amendment to unilaterally raise the debt ceiling, a move that could raise legal issues. Yellen also has doubts, but said economic catastrophe could still be averted.
With so much uncertainty, Senate Democrats were also weighing whether they could take the planned week-long recess starting the Monday before Memorial Day weekend.
Several areas of potential compromise have emerged over the last few days. McCarthy said on Monday that he wants to negotiate some key provisions of the debt ceiling bill passed by House Republicans last month. These include spending caps, domestic energy project change permits, work requirements for safety net programs such as food stamps, and recovery of unused funds allocated to pandemic relief programs.
“Everything I’ve been feeling is going to be very positive,” McCarthy said.
In addition to the speakers, Kentucky Republican Minority Leader Senator Mitch McConnell. Sen. Chuck Schumer, New York Democrat, Majority Leader. Democratic leader Rep. Hakeem Jeffries of New York will also join Mr. Biden at the White House.
The government hit the $31.4 trillion debt ceiling on Jan. 19, and the Treasury Department is playing accounting games to keep the bills paid. The president is scheduled to leave for Japan on Wednesday to attend a meeting of the seven major nations, adding to the urgency of progress on the debt limit.
McCarthy downplayed the progress, but Biden and his allies said the White House and congressional teams had had productive discussions in recent days.
Schumer said on Monday that he “welcomes bipartisan discussions on the future of our nation’s finances.” “But we have made it very clear to our Republican colleagues that default is not an option. The consequences are too harmful, too serious. It must be taken off the table. .”
Administration officials have said they have no intention of withdrawing the president’s signature bill, specifically on climate change, and the Republican bill in the House of Representatives fell apart when it reached the Democratic-led Senate.
The measure would require healthy, undependent adults who receive both federal food aid and Medicaid benefits to work until age 55, up from age 49. It would also close a loophole that Republicans claimed was being abused by states. This allows authorities to exempt food aid recipients from work requirements.
Asked over the weekend whether he was open to tightening labor requirements for aid programs, Mr. Biden said as a senator he had voted for such a measure.
However, on Monday evening, his official Twitter account appeared to shut down such proposals.
“The House Republican wish list will put one million seniors at risk of losing food aid and starving.” Mr. Biden wrote:. “Instead of pushing Americans into poverty, we should reduce the budget deficit by getting the rich and big corporations to pay their fair share of taxes.”
Tightening labor requirements for programs like food stamps has long been anathema to many Democrats, and the proposal would face stiff resistance in the Senate.
“SNAP already has work requirements,” said Pennsylvania Democratic Senator John Fetterman, referring to the supplemental nutritional assistance program. “I’m not here to take food from hungry children. That’s what this proposal is for.”
Allan Lapeport Contributed to the report.
