Speaker of the House Kevin McCarthy said Tuesday he is growing increasingly concerned about President Joe Biden’s reluctance to negotiate to raise the nation’s borrowing authority, sending a letter to the president emphasized the White House’s position could “hold dire ramifications for the entire nation.”
Instead of direct and open talks on the debt ceiling, which the Democrats say must be raised, Biden and the lawmakers in his party are challenging Republicans to present their own budget proposals publicly. So far, McCarthy has declined to do so.
The Treasury Department has turned to “extraordinary measures” to avoid default on the nation’s $31.4 trillion borrowing authority. However, those measures will soon run out, and the U.S. will be at risk of being unable to pay its bills, possibly as soon as June.
The White House emphasizes that the president is unwilling to entertain proposed program cuts merely in exchange for raising the debt limit. But, Republicans and McCarthy insist he must agree to reductions for the debt ceiling legislation to move forward.
The opposing sides are on a slow collision course that could negatively impact the economy.
“Nearly two months ago, you and I sat down to discuss a path forward on the debt limit,” McCarthy wrote in a letter to Biden on Tuesday. “Since that time, however, you and your team have been completely missing in action on any meaningful follow-up to this rapidly approaching deadline.”
McCarthy told Biden, “Simply put: You are on the clock. It’s time to drop the partisanship, roll up our sleeves, and find common ground on this urgent challenge. Please have your team reach out to mine by the end of this week to set a date for our next meeting.”
Press Secretary Jean-Pierre accuses GOP of playing games
White House Press Secretary Karine Jean-Pierre responded, saying, “It’s time for Republicans to stop playing games, pass a clean debt ceiling bill, and quit threatening our economic recovery. The president welcomes a separate conversation about our nation’s fiscal future.”
Only the Freedom Caucus, comprised of many of the House’s most conservative members, has crafted a blueprint, which includes returning to spending levels from the fiscal year 2022 and allowing for 1% annual growth for the next ten years.
The Freedom Caucus’s plan also includes rolling back Biden’s student loan relief, estimated at $400 billion, and pulling back all unspent Covid-19 funds.
The White House has pounced on the proposals from the Freedom Caucus, saying they would lead to ‘draconian cuts.’ It would endanger Americans’ safety by scaling back rail safety inspections, jeopardizing safety at U.S. airports while lengthening wait times at TSA security check points, and cutting federal support for law enforcement.
Republicans claim voters gave them the mandate to put the country on a firmer financial footing for coming decades and reduce any future deficits. Conservatives are portraying the White House as promoting a standoff and trying to shift the blame for any possible damage to the economy that may result. On Monday, GOP Representative Scott Perry, chairman of the Freedom Caucus, said he believes Biden is “stalling here wasting time and running down the clock.”
“If we get into a problem here, a crisis, I think Speaker McCarthy has been ready to go the whole time,” said Perry.
Democrats believe the pressure will continue to increase on Republicans to allow for a straightforward debt ceiling increase, with no trade-offs in spending cuts. Then the lawmakers from both parties can negotiate spending levels for the various federal agencies in spending bills for the next fiscal year.
Failures of Signature Bank in New York and Silicon Valley Bank in California have also increased concerns about the nation’s economy.