Share and Follow
Speaker Kevin McCarthy said he believes he can come to agreement with President Joe Biden on raising the nation’s debt ceiling but refused to lay out the cuts he wants to federal spending and wouldn’t give details about what the two men talked about in their Oval Office meeting on Wednesday.
‘I just walked out having an hour conversation with this president that I tell you – in perspective – was a good conversation. No agreements. No promises except we will continue this conversation,’ he told reporters outside of the White House after the meeting ended.
‘There’s nothing in there with me walking away that does not believe at the end of the day we can come to an agreement that makes America stronger, puts us on a path to balance and exactly what the American people are asking us to do. It’s our responsibility,’ he added.
The two men met for the first time since McCarthy won the speakership and their sit down came amid a stalemate over how to raise the country’s $31.4 trillion borrowing limit.
‘Just finished a wide-ranging discussion with Speaker Kevin McCarthy,’ Biden said in a tweet. ‘I made clear that it’s the shared duty of every leader in Congress not to allow a default. However, I told him that I welcome separate talks about how best to continue reducing the deficit while growing the economy.’
The White House shared a picture of President Joe Biden (right) in his first meeting with Rep. Kevin McCarthy (left) since the California Republican won the House speakership last month
Speaker Kevin McCarthy said he and President Joe Biden didn’t come to an agreement on how to raise the debt limit but agreed to continue talking
The White House, in a readout on the meeting, said it was ‘a frank and straightforward dialogue.’
Ahead of the meeting, both sides laid out their arguments: Biden wanted specifics from McCarthy on what federal spending he wants to cut and McCarthy wants Biden to agree to negotiate with him on future federal budgets.
The meeting ended as it began – in a stalemate.
Both the White House and the speaker said talks will continue. The county is expected to hit its borrowing limit in June. Wednesday’s meeting was expected to be the opening session of many negotiations to come
‘The president and I are trying to find a way that we can work together. We will continue to do that,’ McCarthy said.
The Republicans are pushing for negotiations so they can propose cuts to the federal budget. Biden has made it clear he wants the debt limit raised with no conditions attached. The White House point out Republicans agreed to that three times under President Donald Trump.
The administration doubled down on that stance after the meeting, saying a discussion on reducing the debate is a ‘separate’ one.
‘The President welcomes a separate discussion with congressional leaders about how to reduce the deficit and control the national debt while continuing to grow the economy,’ the White House noted.
The White House said President Biden had ‘a frank and straightforward dialogue’
Before the meeting occurred, the White House said that President Biden would ask McCarthy to agree that the nation shouldn’t default on its debt.
The speaker declined to say if he made that promise.
‘Now is a moment in time. We have five more months,’ he said.
He also refused to say what he specifically wants cut in federal spending, noting he’s not going to negotiate in the press.
But, he added: ‘There’s a lot of savings to find for the American taxpayer. This is a hard-working taxpayer. There’s a lot of places where there’s wasteful Washington spending. I think we can find an agreement.’
He called the debt the ‘greatest threat’ to America.
Read Related Also: Jurors leave Sundance premiere over closed captioning glitch
The U.S. has never defaulted and economists fear a default could trigger a worldwide recession and damage America’s credit rating.
Republicans have tossed out several ideas on how to make the cuts they want to federal spending, including taking federal spending back to its pre-COVID pandemic levels.
The House GOP met Wednesday morning on Capitol Hill to brainstorm on how to cut federal spending. Republican leadership was looking for general thoughts and ideas on what should be cut from their members.
They did indicate that cuts to Social Security and Medicare would be off the table. Slashing the budget of either program could be a political liability for Republicans with voters.
‘This is a lot more of education for a lot of our colleagues about the different components of debt ceiling,’ Rep. Byron Donalds said of their meeting.
Democrats, in turn, argue that there is nothing McCarthy can propose that will get him the 218 votes he needs among his Republicans to move ahead in the legislative process.
McCarthy can only afford to lose four Republican votes if he wants to pass a debt ceiling increase without Democratic help.
Senate Republicans are letting McCarthy take the lead as they stand back to see what happens.
Senate GOP Leader Mitch McConnell made it clear is taking a hands’ off approach.
‘I think the deal has to be cut obviously between the House majority and the Democratic president in order to have a chance to survive over here,’ he said.
Trump raised the debt limit three times during his presidency without any dramatics or standoff negotiations. During his four years in office, the debt increased from $20 trillion to nearly $28 trillion.
But the debt rose even further due to a slew of post-pandemic spending programs Democrats enacted to help the country recover economically from its COVID shutdown.
The U.S. debt is now almost equal to the country’s gross domestic product, a measure of yearly economic output. It’s on track to be 225% of GDP by 2050, according to the Penn Wharton Budget Model.
The U.S. is expected a hit the ceiling on Thursday, forcing the Treasury Department to start using ‘extraordinary measures’ so the government can keep paying bills while Congress negotiates to try and avoid an economic meltdown
The federal debt ceiling was raised in December of 2021 by $2.5 trillion to $31.381 trillion, which is expected to hit on Thursday, January 18.
To stabilize the debt near current levels, the government would need to permanently slash all spending by 30%, raise tax revenues by 40% or some combination of both, Kent Smetters, a professor at the University of Pennsylvania and director of the Penn Wharton Budget Model, to the Associated Press.
The U.S. has never defaulted on its debt, but it has come close.
In 2011, House Republicans, who held the majority, demanded then-President Barack Obama negotiate over deficit reduction in exchange for an increase in the debt ceiling.
The back-and-forth debate went down to the wire, with the debt ceiling being raised only two days before the US defaulted.
Just the brinkmanship sparked a major economic crisis for the country, resulting in one of the worst weeks for the markets since the 2008 financial crisis, sinking stock prices, and taking a toll on people’s retirement savings.
Mortgage rates spiked, hurting prospective home buyers.
The standoff also resulted in the US getting its credit rating downgraded and the economy took months to recover.
