House Speaker Kevin McCarthy and President Joe Biden met on Tuesday at the White House to discuss raising debt limits, but McCarthy reported there had been little progress.
McCarthy’s proposal would have exchanged spending cuts for an increased borrowing limit. Biden has not shown any interest in negotiations. His $6.9 trillion budget plan spends $1.8 trillion more than it brings in.
McCarthy was not enthusiastic about the discussion:
He claimed that Biden had not changed from their February 1 meeting.
McCarthy said that he did “everything I could” to prevent a default and that neither the White House nor Senate had proposed any debt limit plans.
The speaker was then asked if the meeting had made any progress. He responded, “Well progress was made because we actually met. It’s a huge difference. ”
🚨NO MOVEMENT at debt limit meeting
Speaker McCarthy tells me POTUS “pretty much” did not bring any proposals to this meeting and simply rejected what House R’s have done.
Biden and the Big Four will meet again on Friday, staff will talk in the meantime.
— Jacqui Heinrich (@JacquiHeinrich) May 9, 2023
Janet Yellen. Treasury Secretary Janet Yellen said the U.S. could run out of money as soon as June 1 if a deal is not reached. If this happened, she warned, “financial turmoil and economic chaos” would result.
The National Conference for State Legislators describes the possible consequences of an unthinkable event:
By issuing new bonds, the U.S. government could not create more debt. It would be impossible for the federal government to continue paying Social Security and pensions. Federal agencies may furlough employees. Without a temporary emergency measure by Congress and the president, vital economic services such as the Post Office and Transportation Security Administration (TSA), U.S. Customs and Federal Aviation Administration could cease to exist.
McCarthy tweeted the House Republicans have done their job and now it is time for the Democrats.
Just finished meeting at the White House. My position is clear and reasonable—House Republicans have done their job to avoid a default and responsibly raise the debt limit. Democrats must now do the same. https://t.co/AkR3DoagD9
— Kevin McCarthy (@SpeakerMcCarthy) May 9, 2023
What is the next step, according to the speaker?
McCarthy said that the next steps on this issue will be staff meetings throughout the rest of the week, followed by a meeting with Biden and McCarthy, and other congressional leaders on Friday.
McCarthy defended the position of his party that spending cuts must be made before raising the debt limit. McCarthy pointed out that Senate Democrats had done nothing, but the House passed the Limit, Save, Grow Act, achieving both. Democrats are calling the House bill non-starters and have called for a clean debt ceiling increase.
Biden on the other side seems unwilling to compromise. Ted Cruz (R-TX) noted that President Obama’s intractability is like “playing roulette with the economy”.