Joe Biden Kevin McCarthy meeting yields no debt ceiling deal

WASHINGTON — House Speaker Kevin McCarthy said he had a “superb discussion” with President Joe Biden on the White House on Wednesday concerning the looming debt ceiling and federal spending.

“We now have different perspectives. But we each laid out a few of our vision of where we might need to get to. And I think, after laying them each out, I can see where we will find common ground,” McCarthy told reporters on the White House following the meeting.

The Democratic president and the California Republican talked for over an hour, and while there have been “no agreements” and “no guarantees,” McCarthy said they’d proceed their conversation. The White House readout of the meeting reflected McCarthy’s sentiments, stating the 2 had a “frank and simple dialogue” as a part of an ongoing conversation.

The Biden administration repeated a well-recognized phrase that the president is “desperate to proceed working across the aisle in good faith,” but stressed that he doesn’t intend to barter on lifting the debt ceiling.

“It’s their shared duty not to permit an unprecedented and economically catastrophic default,” the White House statement read. “The USA Structure is explicit about this obligation, and the American people expect Congress to satisfy it in the identical way all of his predecessors have. It shouldn’t be negotiable or conditional.”

The House speaker later said the meeting had gone higher than he expected. McCarthy added that he believes investors should feel higher concerning the prospect of an agreement to avoid a first-ever default on U.S. debt.

“I might feel higher, if I used to be the markets, based upon the meeting I had today,” he said, in keeping with Punchbowl News.

The Treasury Department has launched a series of extraordinary steps to maintain paying the federal government’s bills, and it expects those measures can be enough to avoid default no less than until early June. But when Congress doesn’t raise or suspend the debt limit by then, it could wreak economic havoc world wide.

McCarthy has held the position that the 2 parties have to comply with reduce on spending before lifting the debt ceiling. The White House said the president agrees that addressing the national debt is a priority, however it ought to be a separate conversation.

“The President welcomes a separate discussion with congressional leaders about easy methods to reduce the deficit and control the national debt while continuing to grow the economy. This conversation should construct on the President’s leadership in delivering a record $1.7 trillion in deficit reduction in his first two years in office,” the administration statement said.

For House Republicans, nonetheless, that is a non-starter. They view a vote to extend the federal government’s borrowing power and their demands for cuts to government spending as inextricably linked.

“If you may have a baby, and also you give them a bank card and so they spend it to the limit, you are chargeable for paying that bank card. However the responsible thing to do going forward shouldn’t be just to boost the limit, but have a look at the way you’re spending,” said McCarthy.

This comparison has grow to be a well-recognized line from the Speaker, the implication being that while House Republicans don’t intend to let the US default on its debt, they are going to insist on changes to how much money the federal government spends.

But just what those changes can be stays a mystery, and an area of contention throughout the House Republican caucus.

Asked by reporters on the White House what spending cuts he was searching for, McCarthy replied, “I’m not going to go negotiate this within the press.”

Over the approaching months, McCarthy’s job is to construct consensus inside his caucus on what spending cuts he should push for during debt ceiling negotiations.

It is a task further complicated by the indisputable fact that not all of his GOP caucus members share his belief that the federal government must raise the debt ceiling in any respect.

Several fiscal hardliners within the House have already made it clear they’re willing to force a default on the national debt in the event that they do not get massive spending cuts in return for passing it.

The difficulty with these demands are that any debt ceiling bill the House approves must also find a way to win 60 votes to pass the Democratic-controlled Senate before the president can sign it into law.

Within the Senate, the type of draconian spending cuts sought by some far-right House Republicans would haven’t any probability of passing.

On Wednesday, the Democratic Senate Majority Leader Chuck Schumer of Latest York reminded the House speaker of his challenge.

“For days, Speaker McCarthy has heralded this sit-down as some sort of major win in his debt ceiling talks,” Schumer said on the Senate floor. “Speaker McCarthy, in case you haven’t got a plan, you’ll be able to’t seriously pretend you are having any real negotiations.”

McCarthy’s task of uniting his unruly caucus behind one plan can be difficult under any circumstances. However it’s all of the more difficult because his majority within the Home is so slim.

If the Speaker were to attempt to pass a House debt ceiling bill with only Republican votes, he could only afford to lose 4 members of his caucus and still reach the 218-vote majority needed to pass the laws.

He could also attempt to craft a debt ceiling bill that will pass with votes from more moderate Republicans and a big bloc of Democrats.

Betting on members of the opposing party to bail him out can be dangerous. But not as dangerous as failing to lift the debt ceiling altogether. 

For each Democrats and Republicans, nonetheless, the worst case scenario stays that of an unprecedented U.S. government default on its debt, one that might halt day by day operations throughout the federal government and quickly ripple through equity markets and the broader economy. 

A Moody’s Analytics report last yr said a default on Treasury bonds could throw the U.S. economy right into a tailspin as bad because the Great Recession. If the U.S. were to default, gross domestic product would drop 4% and 6 million employees would lose their jobs, Moody’s projected.