On Wednesday, President Joe Biden and Republican House Speaker Kevin McCarthy talked about raising the limits on how much the U.S. government can borrow. This was their first chance to see how well they can work together, and both sides agreed to keep talking.
After the meeting, the White House said that Biden told McCarthy that he was eager to work “in good faith” with Republicans. McCarthy said that the two men would be able to agree on something. But, as was expected, there was no sign of a breakthrough right away.
McCarthy told reporters after the more than hour-long meeting, “The president and I had a good first meeting.” He said that the two men talked about how they saw things. “I think we’ll be able to agree on something in the end,” he said.
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The Democratic president and the Republicans, who took control of the U.S. House of Representatives in November’s elections, can’t agree on how to raise the U.S. debt ceiling, which is currently $31.4 trillion. If they don’t, the largest economy in the world will be on its way to default.
The White House said in a statement that “President Biden made it clear that, as every other leader in Congress from both parties has said, it is their shared duty to prevent an unprecedented and economically disastrous default.” “It can’t be changed or negotiated.”
The talks in the Oval Office could be the first step in months of back-and-forth. Neither side thought that a single meeting would lead to a solution. If nothing is done, the government might not be able to pay all of its bills by June.
McCarthy was hopeful that a situation like this could be avoided.
McCarthy said, “I think if we can come to an agreement, we could have a funding deal for the next two years.” “I told the president that I’d like to see if we can come to an agreement a long time before the deadline.”
Biden said he wanted to see McCarthy’s plan for the budget. When reporters asked him on Tuesday if he would negotiate with the House leader, he said, “Show me his budget!”
The White House said that Biden was willing to talk about cutting the deficit even if it wasn’t related to the debate over the debt ceiling. “The president welcomes a separate discussion with congressional leaders about how to reduce the deficit and control the national debt while keeping the economy growing,” it said.
The Republicans in the House want to use the debt ceiling as a way to force cuts, but they haven’t agreed on a plan yet. The increase pays for spending programmes and tax cuts that Congress has already approved. It is usually approved by both parties.
CONTRASTS
The 80-year-old president is a longtime former senator who was vice president during a similar showdown in 2011 that led to a historic downgrade of the federal government’s credit rating. He goes into the talks with what some of his aides think is a strong hand, including a narrow Senate majority, a party that is united on this issue, and a strong message for voters.
McCarthy, 58, has been Speaker of the House of Representatives for less than a month. He leads a divided group of Republicans with a narrow majority of 222-212, which has given a small group of hard-line conservatives a lot of power.
Even though Biden has known other Washington lawmakers for years, he doesn’t know McCarthy very well. McCarthy joined the Republican leadership on Capitol Hill under former Speaker John Boehner after Biden left to become Barack Obama’s vice president.
Only one out of every four Republicans in the House today held their seats in 2011. Some of them may not fully understand the risks of courting default or how hard it is to negotiate when the government is split.
Congress has often put conditions on raising the debt ceiling or done it in conjunction with other taxes and spending.
U.S. debt is different.
Unlike most other developed countries, the United States has a hard limit on how much it can borrow, and Congress has to raise that limit every so often because the U.S. government spends more than it brings in.
Shortly before the meeting at the White House, Jerome Powell, the head of the Federal Reserve, told reporters, “There is only one way forward, and that is for Congress to raise the debt ceiling.”
Powell said that no one should think that the Fed can protect the economy from the effects of not acting quickly enough.
The crisis in 2011 was solved by a deal between Democrats and Republicans that cut spending and raised the debt limit, but it hurt the Obama administration. Many people thought they had given up too much and hurt the economy by continuing to talk.
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McCarthy doesn’t have as much room to move as his Republican counterpart did in 2011.
To get the speaker’s gavel, he agreed that any single member could call for a vote to get rid of him. If he wants to work with Democrats, this could get him kicked out of office. He also put three very strict conservatives on the Rules Committee, where they could stop any vote on a compromise.
At a fundraiser in New York on Tuesday, Biden seemed to question McCarthy’s ability to keep Republicans in line. He called McCarthy a “decent man,” but he also mentioned the sacrifices he had to make to become speaker.
McCarthy, for his part, said that Biden needed to be willing to make concessions in order to get Congress to raise the debt ceiling. He said that not being willing to negotiate would be “irresponsible.”
