top line
President Joe Biden warned Sunday that Republicans in Congress could do something “outrageous” to force the United States to default on its loans, as negotiations between Congressional Republicans and the White House over raising the debt ceiling remain uncertain and a June 1 deadline to avoid looming. virtual horizon.
President Joe Biden gestures during a news conference in Hiroshima, Japan, Sunday, May 21, 2023. … [+]
key facts
During a news conference after the G-7 summit in Japan, Biden called congressional Republican demands for spending cuts in return for raising the debt ceiling “extreme,” though he said he was “willing to cut spending.”
The president also said he could not promise during meetings with fellow world leaders that the United States would not default, a move that would have ramifications around the world, but he said earlier at the briefing that the United States “never defaulted.” Our debts and never will.”
Biden also reiterated that he was considering bypassing Congress and continuing to foot the nation’s bills by invoking an obscure provision in the Fourteenth Amendment stating that “the validity of the public debt of the United States … shall not be questioned,” but he noted potential legal challenges and narrowness. the time.
Crucial quote
“I can’t guarantee they won’t force a default by doing something outrageous,” Biden said at the news conference, referring to congressional Republicans who have not backed down on their requests to cut federal spending.
What to watch
The Treasury Department has estimated that the United States may become unable to pay its bills as early as June 1, leading to a catastrophic economic downturn. In an interview Sunday on NBC Meet the pressThe projections remain accurate, Treasury Secretary Janet Yellen said, adding that it is unlikely that the US will reach June 15 – when tax revenue is expected to increase – and be able to pay all of its bills. Yellen cited “uncertainty about tax receipts” and noted that ongoing negotiations over raising the debt ceiling could affect payment for government services like Medicaid and Social Security, among others.
The main critic
“Nothing was ever agreed upon,” House Speaker Kevin McCarthy said, during an interview with Fox News Sunday morning futures. McCarthy has publicly opposed Biden’s Fourteenth Amendment strategy. Earlier this month, McCarthy said the Civil War-era amendment was not discussed in a meeting the two had, but called the debt ceiling solution a failure.
Tangnet
A group of 11 senators, led by Bernie Sanders (I-Vt.), urged Biden on Friday to use the Civil War-era amendment in order to prevent the United States from defaulting on its debt. Invoking the amendment would allow the government to continue issuing debt without congressional approval — but it’s a legally untested strategy that could spark court challenges. He also accused the Republican senators of making it “seemingly impossible to strike a bipartisan budget deal at this time” because of their demands to raise the federal borrowing limit.
main background
Republicans in Congress and the White House have been at odds since January over raising the government’s borrowing limit above the current $31.4 trillion. Appointed negotiating teams moderated the talks last week as the parties tried to move toward a solution. The Republicans’ goal is to cut federal spending and reduce Biden’s policy priorities. The White House wants to increase the debt ceiling without strings attached. Republicans made some strides last month after the House passed legislation to raise the debt ceiling by $1.5 trillion through March next year by enacting a number of spending cuts, but the bill has no prospect of passing the Senate. Biden has said he would be open to waiving one of those conditions—increasing the required age of welfare recipients to work for food stamp benefits—but some Democrats aren’t happy with that potential waiver.
Further reading
McCarthy says (Forbes): The return of critical talks on the debt ceiling after an abrupt halt
Democrats Urge Biden to Dodge GOP Debt Ceiling Demands Using Civil War-era Amendment (Forbes)
Social work requirements emerge as central issue in combating debt ceiling (Forbes)
More Democrats slam Biden in debt ceiling talks (Forbes)
