Expectations low for Biden-McCarthy meeting to reach debt ceiling deal

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February 02, 2023
Expectations low for Biden-McCarthy meeting to reach debt ceiling deal

President Joe Biden met with House Speaker Kevin McCarthy at the White House on Wednesday afternoon, the first two leaders since Republicans took control of the House after the November midterm elections. first face-to-face meeting.The two discussed a range of issues, including the urgent need to raise the U.S. debt ceiling and the amount Congress authorized the government to borrow to meet existing spending obligations.

The U.S. reached its $31.4 trillion debt ceiling on January 19. If no agreement is reached, the United States will default for the first time, which may plunge the economy into crisis.
Expectations for a breakthrough in the talks are low. Observers pointed out that since this was their first meeting, neither side had the incentive to strike a compromise too quickly and appear weak.
The White House has drawn a hard line in the negotiations, insisting that the debt ceiling should be lifted without conditions.

White House press secretary Karine Jean-Pierre said at a briefing Wednesday that raising the debt ceiling is Congress’s “constitutional duty,” reiterating that the debt ceiling has been raised 78 times since 1960 , including 49 under Republican presidents and 29 under Democratic presidents.

In a memo released earlier this week, National Economic Council Director Brian Deese and Office of Management and Budget Director Shalanda Young said that in a meeting with McCarthy, Biden will “seek a clear commitment” that a U.S. debt default is not on the table. They called on Republicans to submit a detailed budget proposal specifying their goals for spending cuts.

McCarthy and House Republicans have said their goal is to cut “wasteful Washington spending” as part of a deal to raise the debt ceiling, but have yet to formalize the items they want cuts. Republicans have generally said their goal is to cut domestic programs and reduce some defense spending while avoiding cuts to two social programs that voters of both parties want to protect: Medicare, the Health Insurance Program for the Elderly, and insurance for retirees and the disabled. People provide payment for social security programs.

McCarthy under pressure

McCarthy is under pressure from members of the ultra-conservative Republican Freedom Caucus, who want to drastically limit the size and scope of the federal government and budget, and reform Congress to make it easier to do so. Twenty lawmakers, most of them members of the Republican Freedom Caucus, did not vote for McCarthy as speaker in most or all of the 15 rounds of voting in early January until he committed to meeting their procedural and policy demands, including only It takes a member of Congress to ask for a vote to remove him from office.

“There is very little evidence” that McCarthy can control the Republican Freedom Caucus, said Ruth Bloch Rubin, who teaches American politics at the University of Chicago. However, the House has 222 Republicans and 212 Democrats, so it only takes a handful of Republicans to build a bipartisan coalition to achieve the 218 votes needed to lift the debt ceiling.

“McCarthy’s grip on the Republican Party is tenuous in terms of the speaker fight — but perhaps not for the lawmakers most sympathetic to bipartisan compromise,” Rubin told VOA.
For many in Washington, the debt Brinkmanship feels familiar. Republicans in Congress voted against raising the debt ceiling under Democratic President Barack Obama in 2011 and 2013, but raised it three times under Republican President Donald Trump.

The U.S. government is expected to be able to continue operating until at least early June, but it is unclear how long the Treasury Department can keep from defaulting on its debt.
So while now is not the time to panic about the debt ceiling, now is the time for both parties to get serious and get to work, said Rachel Snyder, senior associate director for business and economic policy at the Bipartisan Policy Center. Rachel Snyderman said.

“In times of economic change and uncertainty, the last thing hard-working Americans need is political brinkmanship that jeopardizes the full trust and credibility of America,” she told VOA.
A debt default could also lead to a global economic crisis, as many companies and foreign governments park their capital reserves in U.S. Treasuries. In 2011, the threat of default downgraded the U.S. government’s credit rating and caused major stock market crashes around the world.

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