After a weekend of near stalemate, Biden returned to Washington late on Sunday, interrupting a trip to Asia to resume talks ahead of the June 1 deadline set by the U.S. Treasury for Congress to authorize more loans .
Stock indices opened with no clear direction, with the Dow Jones rising 0.02 percent, while Wall Street focused on the stalemate.
Biden and McCarthy spoke as the president returned to the United States from the G7 summit in Japan.
“Went well”, Biden told reporters about the call when he arrived at the White House on Sunday night (21). “We’ll talk about it tomorrow.”
And earlier in the day, McCarthy had said the conversation had been “productive” — in contrast to the harsh words exchanged in an earlier round of talks.
Still, the two sides appeared far from a final compromise, as Biden said Republicans’ latest demands for spending cuts as a condition of increasing the US government’s borrowing power were “plainly unacceptable.”
“It is time for the other side to abandon its extreme positions,” he said at a press conference before leaving the G7 summit in Hiroshima. McCarthy said his position remains unchanged.
“Washington cannot continue to spend money we don’t have at the expense of our children and grandchildren,” he said on Twitter after speaking with Biden.
“Something Scandalous”
Biden said he was looking at an obscure constitutional provision of the 14th Amendment, which states that the validity of the national debt “shall not be questioned” — and which may authorize the president to bypass Congress and raise the debt ceiling himself.
“I think we have the authority to do this. The question is whether it will be possible to do this and invoke it in a timely manner,” he said, referring to the likelihood of legal challenge and the fast approach of the payment term of the debt. .
The Treasury Department says the government could run out of cash and default on its $31 billion debt as early as June 1 if Congress, where Republicans control the House of Representatives, does not authorize more loans.
Treasury Secretary Janet Yellen said on Sunday that June 1 remains a “tough deadline”, adding: “My assessment is that the chances of us reaching June 15 and paying all our bills are quite slim”.
Biden planned to travel from Japan to Papua New Guinea and Australia, but cut short his trip to Asia due to debt talks.
This added to the impression that he arrived at the G7 summit a weakened leader of a divided country, stumbling from crisis to crisis as the world watched in horror.
spend and tax
Raising the debt ceiling is normally an uncontroversial annual procedure, but this year the increasingly right-wing Republican Party turned the threat of default into a powerful lever to try and force Biden to accept cuts.
The US government will soon have to borrow more to cover expenditures already agreed in the current budget.
If a debt ceiling agreement is not reached, Washington will be unable to pay its bills and will trigger a series of global economic shock waves – including, according to the White House, a recession in the US.
With the 2024 election campaign underway and Biden once again able to run Donald Trump, Republicans took the opportunity to portray Democrats as responsible for the country’s gargantuan debt — which is actually in accumulated over decades.
Republicans say the debt ceiling cannot be raised any further without tough measures to reduce the deficit. These include cutting social spending and limiting access to Medicaid, the subsidized program that provides health care to the poor.
Biden hit back with a plan to make some cutbacks, but also bring in new revenue by raising taxes for the wealthiest Americans and companies currently enjoying huge tax breaks. Republicans refuse to accept tax increases as part of a deal.
“This is where we still have significant disagreements, as far as revenue goes,” Biden said.
Source: DN
