Biden: Debt meeting ‘productive’, default ‘not an option’
Republicans and Democrats failed to make any headway in their first face-to-face confrontation on the debt-limit impasse in a high-stakes meeting at the White House on Tuesday. President Joe Biden and congressional leaders agreed to continue talks this week to avoid the looming risk of a government default, without resolving the deadlock.
The US government is approaching its legal limit on loans, and if Congress fails to raise the debt ceiling, it will be unable to pay its bills from June 1. At the meeting, Republicans hoped to negotiate sweeping cuts to federal spending in exchange for new loans to avoid default. Conversely, Biden strengthened his opposition to allowing the country’s full confidence and credit to be held hostage by the negotiations and affirmed that he would hold budget talks only after the default is no more a threat.
Speaking at the White House after the hour-long discussion in the Oval Office, Biden declared his certainty that the country could avoid default, adding that America’s failure to meet its obligations was not an option. However, House Speaker Kevin McCarthy stated that he did not see any new movement to resolve the deadlock.
After the talks, lawmakers and their staff would continue discussions on the annual federal budget at Biden’s encouragement. The President, however, said he was open to reducing the federal deficit through discussions on his budget plan, which would reduce deficits by almost $3 trillion over a decade, mostly through tax increases on the wealthy and changes like allowing the government to negotiate on prescription drugs prices.
Republicans have passed a sweeping bill to cut spending, which the White House has threatened to veto. The bill hopes to achieve $4.5 trillion in deficit savings through spending cuts, eliminating tax breaks for clean energy investments, and reversing Biden’s plans to reduce student loan debt burdens.
The President’s refusal to negotiate on the debt limit is informed by his first-hand experience in 2011 when he was Vice President. Prior to Tuesday’s meeting, McCarthy and White House Press Secretary Karine Jean-Pierre insisted avoiding default would be easy, given the other side capitulated. However, the abyss between these opposing attitudes has fomented uncertainty, which is upsetting financial markets and risks turning into a tidal wave that engulfs the country’s economy.
The default, officials said, would threaten to cut off payments to retirees, destabilize global markets and drag the nation into a potentially debilitating recession. The business community has called for a bipartisan approach to tackle the crisis, and the Chamber of Commerce has suggested spending limits and reforms could be places to begin.
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