Yellen claims ‘some areas of agreement’ have been found in debt ceiling battle
Ryan King
Video Embed
Negotiators have made some headway in the debt ceiling deadlock, according to Treasury Secretary Janet Yellen.
Yellen conveyed optimism that both sides have managed to find some common ground in recent days, despite President Joe Biden‘s follow-up meeting with congressional leaders slated for Friday getting postponed.
DEBT CEILING DEADLINE RAISES EYEBROWS OVER BIDEN’S NEGOTIATION STRATEGY
“My understanding is that the meeting with leadership was postponed because the negotiators are making some progress and want to have something concrete to discuss with the leadership when they meet again,” Yellen said, per the Wall Street Journal. “I’m hopeful. I think the negotiations are very active. I’m told they have found some areas of agreement.”
Biden and the “big four” congressional leaders are set to hold their postponed talks next week. Biden and House Speaker Kevin McCarthy (R-CA) had sat down for the first time on the debt ceiling since February on Tuesday. At the time, neither side appeared to budge in their negotiations.
McCarthy has demanded any hike in the nation’s $31.4 trillion borrowing limit, reached in January, be paired with spending cuts. Meanwhile, Biden and the Democrats have been adamant that the debt ceiling be lifted without any strings attached and have accused the GOP of holding the nation’s economy hostage.
Democrats have publicly left the door open to separate negotiations on spending.
Yellen did not elaborate on the specifics of the progress made. Multiple reports have indicated that Biden’s team is privately talking about a two-year debt limit deal that would impose some caps on discretionary spending and rescind unused COVID-19 funds.
Republicans’ Limit, Save, Grow Act debt ceiling proposal, which cleared the House without a vote to spare last month, would raise the borrowing authority by $1.5 trillion or until March 25, 2024 — whichever comes first.
Additionally, Republicans have sought dramatic cuts in spending as part of that package to the tune of roughly $4.8 trillion in deficit reduction over the next year, according to an estimate from the Congressional Budget Office. Some of their proposed cuts include Biden’s Inflation Reduction Act.
Yellen recently bumped up the timetable to that the U.S. could default on its debt as soon as June 1. The Treasury Department has been undertaking “extraordinary” measures of moving money around in hopes of postponing that outcome.
“Default would erase millions of jobs, trigger a recession, hit retirement accounts, and increase borrowing costs. It’s not an option,” Biden tweeted Saturday.
https://twitter.com/POTUS/status/1657355009019858945?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Etweet
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
Senate Majority Leader Mitch McConnell (R-KY) has been resolute that the United States will not default despite the impasse. Biden and Yellen have publicly declined to rule out the possibility of circumventing the debt limit via the 14th Amendment, while warning of its pitfalls if used.
Many Republicans in Congress have soured on the prospect of backing a short-term debt limit hike if negotiations fail to reach a breakthrough in time.