NO CONSTITUTIONAL SOLUTION
Karine Jean-Pierre also appeared to be ruling out a constitutional solution to the debt crisis, telling reporters such a move “is not going to fix the current problem we have right now”.
Some legal scholars had argued that invoking the 14th Amendment to the Constitution would allow the US Treasury to simply ignore the debt limit and keep borrowing to meet its commitments.
Jean-Pierre also appeared to rule out a short-term extension to the debt ceiling to allow Biden and McCarthy’s teams more time to negotiate, telling reporters such a solution is “not on the table”.
After three rounds of talks between Biden and McCarthy, the contours of a potential deal include a debt-limit increase with curbed federal spending, reforms to simplify the approval process for energy projects and a clawback of up to US$70 billion in unspent pandemic relief.
But cutting spending next year to 2022 levels remains a “red line” that Republicans are insisting on, and something the Democrats have so far refused to commit to.
The Biden administration has proposed freezing current spending limits where they are, but wants the Pentagon to share in any budget cuts, which runs counter to Republican objectives to boost military and border security spending.
Biden also wants any deficit reduction to be achieved in part by raising taxes on corporations and the wealthy, not just through spending cuts, which Republicans have ruled out.