WASHINGTON: President Joe Biden said on Tuesday (May 9) he made clear in a meeting with top Republican lawmakers that a US default “is not an option”, as both sides failed to reach a breakthrough on the country’s debt limit.
Republican House Speaker Kevin McCarthy and Mitch McConnell, the Senate minority leader, met with Biden at the White House in the latest round of a power struggle threatening massive consequences for the world’s largest economy.
The Republicans were also joined by the top two congressional Democrats: Senate Majority Leader Chuck Schumer and House Minority Leader Hakeem Jeffries.
McCarthy said after the talks that he “didn’t see any new movement”, although the four and Biden will meet again on Friday.
“We need to take the threat of default off the table,” Biden said after the talks, warning of dire economic consequences that would ensue.
Asked if he was considering postponing his upcoming trip to Asia for Group of Seven (G7) meetings, Biden added that he is “still committed” to attending but added that the debt ceiling talks were crucial.
He conceded it was “possible” he did not make the trip, telling reporters: “If somehow we got down to the wire and still haven’t resolved this … I would not go.”
The lifting of the so-called debt ceiling – a limit on government borrowing to pay for bills already incurred – is often routine.
But budget-minded Republicans, who won control of the House of Representatives in the 2022 midterm elections, have vowed to only raise the limit from its current US$31.4 trillion maximum if spending curbs are enacted.
After the meeting, Jeffries said that “extreme” Republicans “have indicated that they are willing to take us down the path of default”.
“That is reckless, irresponsible, and extreme,” he said.
A similar impasse in 2011 resulted in the United States losing the coveted AAA debt rating.
Time is critical. On Sunday, Treasury Secretary Janet Yellen warned that unless Congress acts in the coming weeks, “financial and economic chaos would ensue”.
Yellen has also had conversations with CEOs to discuss the dangers of brinkmanship, a source familiar with the matter confirmed to AFP.
RUNNING OUT OF TIME
While McConnell told reporters after the meeting that “the United States is not going to default”, he stressed that “we are running out of time”.
White House Press Secretary Karine Jean-Pierre argued before the Oval Office talks that it is the Republican lawmakers’ constitutional duty to act.
“The exit ramp for them is to do their job,” she said, referring to raising the debt ceiling without condition.
But McCarthy maintained on Tuesday that House Republicans were doing their jobs by passing a plan that raises the borrowing limit, while instituting major government spending cuts. He instead accused Biden of holding the country hostage.