Biden sticks with refusal to barter debt restrict with House Republicans as nation faces default

The White House stated Tuesday that President Biden isn’t budging in his refusal to commerce spending cuts with House Republicans in trade for Congress lifting the federal debt restrict, regardless of the nation being lower than a month away from default.

Mr. Biden is ready to fulfill with House Speaker Kevin McCarthy and different leaders on the White House subsequent week to debate the matter. But White House Press Secretary Karine Jean-Pierre was fast to make clear the long-awaited assembly isn’t a sign that Mr. Biden favors something aside from a clear debt-ceiling hike.

“Given the limited time Congress now has, it is clear that the only practical path to avoid default is for Congress to suspend the debt limit without conditions,” stated Ms. Jean-Pierre.

The White House stated Mr. Biden will pitch Mr. McCarthy on “initiating a separate process” to barter spending ranges forward of the federal government funding deadline on the finish of September. That place has been unacceptable to House Republicans.

Sen. Tim Kaine, an administration ally, stated that even with out the debt restrict, Republicans can be in a great place to barter fiscal cuts by the very nature of their management of the House.

“I think the right answer is still to raise the debt ceiling and then have a really tough budget negotiation,” stated Mr. Kaine, Virginia Democrat. “But allowing Republicans to threaten a default to get their budget negotiations is not an option.”

Republicans say their leverage can be diminished with out together with the debt ceiling in negotiations. 

Congress doesn’t need to go a full-year-long price range, as a substitute opting to go short-term funding measures to maintain the federal government open. If House Republicans and Mr. Biden cannot agree on even a short-term funding measure, the federal authorities would shut down.

House Republicans, who’ve acquired the brunt of the blame within the media and in polls for presidency shutdowns up to now, should not longing for the battle. That’s very true since Mr. McCarthy solely has a slim, five-seat majority the place 18 House Republicans signify districts carried by Mr. Biden in 2020.

“Government shutdowns never work to the benefit of Republicans,” stated a senior House GOP aide. “Biden might even be wishing for one because it feeds into the narrative that House Republicans can’t govern. The debt limit is really the only way to get major concessions on spending.”

With Mr. Biden and House Republicans entrenched, the nation is barreling in the direction of a first-ever default on the flexibility to pay its money owed.

The fiscal cliff is approaching faster than economists initially anticipated. On Monday, Treasury Secretary Janet Yellen warned Congress that the U.S. may be unable to pay its payments as early as June 1 if lawmakers don’t elevate the federal debt restrict.

It was initially believed that Congress had a minimum of till the tip of June to boost the debt restrict, however Ms. Yellen stated lower-than-expected tax income has compelled the date ahead.

Since January, the Treasury Department has undertaken “extraordinary measures” to stave off default after the federal government hit its $31.4 trillion borrowing capability. Those emergency techniques give the federal government solely sufficient room to cowl day-to-day bills.

House Republicans have lengthy demanded spending cuts in trade for lifting the debt ceiling, they usually accepted laws final week to realize that purpose. The GOP invoice would elevate the debt ceiling by $1.5 trillion till May 2024 in trade for $4.8 trillion in spending cuts.

Apart from elevating the debt restrict, the Republican invoice would minimize federal spending by $130 billion for the upcoming fiscal 12 months and restrict price range development to 1% yearly over the following decade. It additionally rescinds a minimum of $90.5 billion in unspent pandemic reduction, imposes new work necessities on welfare, cancels Mr. Biden’s scholar mortgage forgiveness program, and scraps $200 billion in green-energy tax credit.

Democrats say the GOP’s invoice is a non-starter. Senate Majority Leader Charles E. Schumer has known as it useless on arrival, whereas House Minority Leader Hakeem Jeffries is floating a petition to power a vote on a clear debt-ceiling invoice in opposition to Mr. McCarthy’s needs.

Mr. Jeffries, New York Democrat, stated formally the maneuver was to present lawmakers a backup possibility if talks fail between Mr. McCarthy and the White House.

“House Democrats are working to ensure we have all options at our disposal to avoid a default,” Mr. Jeffries wrote in a letter to Democratic lawmakers. “The filing of a debt ceiling measure to be brought up on the discharge calendar preserves an important option.”

To succeed, a minimum of 218 lawmakers would want to again the seldom-used petition within the narrowly managed GOP House. At the second, Republicans maintain 222 seats to the Democrats’ 218, that means a minimum of 5 GOP lawmakers would want to buck Mr. McCarthy.

While the prospects of such defections seem unlikely, Mr. McCarthy’s place was buoyed by Senate Minority Leader Mitch McConnell on Tuesday.

Shortly after Mr. Jeffries’ pitch was made public, Mr. McConnell stated he wouldn’t present the 9 votes essential to go a clear debt ceiling invoice within the 51-49 Senate.