What to know about debt ceiling battle following White House meeting
Brady Knox
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House Speaker Kevin McCarthy (R-CA) emerged from a meeting with President Joe Biden Tuesday with little movement from either side on debt ceiling negotiations.
Another round of negotiations is set to commence on Friday, but neither Biden nor McCarthy have signaled a willingness to budge.
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Here is everything you need to know about the debt ceiling negotiations.
What is the debt ceiling, and why is it important?
The debt ceiling is the amount of money the United States government is legally allowed to spend on its current obligations, including Social Security and Medicare benefits, military salaries, interest on the national debt, and tax refunds, the Department of the Treasury reports. Congress has raised the debt limit 78 times since 1960.
A failure to raise the debt ceiling would force the state to default on its debts, resulting in an economic catastrophe, and the U.S. would likely enter another recession. Republicans and Democrats in Congress have both recognized the dangers of the prospect.
Treasury Secretary Janet Yellen said the country could default by June 1 if the debt ceiling isn’t raised.
What’s the holdup?
Though both parties agree that a default would be disastrous and should be avoided at all costs, Republicans are using the prospect of default to leverage several concessions from Democrats.
Some of the concessions House Speaker Kevin McCarthy is seeking are setting some work requirements for welfare benefits, and cutting government spending in a number of areas. Biden and the Democrats have decried the cuts and pledged not to budge.
“The ransom note that Speaker McCarthy unveiled in front of a crowd of Wall Street bankers today is dead on arrival,” Biden said in a press release last month. “Let me be perfectly clear: holding food assistance hostage for those who depend on it, including 15.3 million of our children, 5.8 million of our seniors, and 1.2 million of our veterans, in exchange for increasing the debt limit is a non-starter.”
Where do negotiations stand currently?
Despite optimism from some, a sit-down meeting at the White House on Tuesday with Congressional leadership appeared to go nowhere. In an hour-long conversation between conversation McCarthy, Senate Minority Leader Mitch McConnell, Senate Majority Leader Chuck Schumer, and House Minority Leader Hakeem Jeffries, neither side changed their position. The meeting was first since Biden and McCarthy met in February.
Another meeting is set for Friday, but there haven’t been any signs that either side plans to cede any ground. McConnell pleaded with Biden to accept the reality of a split government and make concessions, portraying him as the only one who could avoid the default. Meanwhile, Democrats continue to accuse McCarthy of taking the national debt “hostage.”
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“Instead of him giving us a plan to avoid default, he gave us a plan to take default hostage, and that is a shame,” Schumer said of McCarthy. “To use the risk of default, with all the dangers that has to the American people, as a hostage, and to say it’s my way, or no way, or mostly my way or no way, is dangerous.”
https://twitter.com/SenSchumer/status/1656077915673460736?s=20
McConnell has pledged to take the risk of default off the table, but McCarthy has yet to.
Will Biden use the 14th amendment to avoid a default?
Biden said he is “considering” using the 14th amendment to avoid a default of the nations national debt.
The possibility of Biden using the 14th amendment to sidestep Congress on raising the debt ceiling has been a repeat topic of conversation as the deadlines draws near. The prospect of Biden using the amendment to solve the debt crisis is untested, however, and would likely trigger a legal battle if put into effect.
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Biden expressed doubt about using the amendment on Tuesday, saying it would “have to be litigated, and in the meantime, without an extension, it’d still end up in the same place.”
“We agreed to continue our discussions, and we’re going to meet again on Friday. In the meantime, our staff are going to meet today and daily between now and then,” Biden said. “I made clear during our meeting that default is not an option.”