US Congressional leaders, WH on tenterhooks after meeting to resolve debt ceiling crisis fails
US President Joe Biden and Congressional leaders from across the aisle will meet again on Friday as their first meeting ended in a stalemate to help resolve the impending interest payment debt default crisis after a contentious confrontation at the Oval Office.
Washington, May 10,2023: US President Joe Biden and Congressional leaders from across the aisle will meet again on Friday as their first meeting ended in a stalemate to help resolve the impending interest payment debt default crisis after a contentious confrontation at the Oval Office.
While the Republican Congressmen and Democrats traded charges of being unreasonable and unrelenting on their stands, for the first time, President Biden confirmed reports that the White House has been discussing a unilateral step of invoking the 14th Amendment to the Constitution to get over Congress and bypass the debt ceiling limit.
But Biden seemed equally firm to dismiss the idea, saying it would lead to concerns of litigation complicating matters, media reports said.
NBC quoted a reliable source to say the mood in the room was “tense and serious”, and claimed that Biden suggested that House Speaker Kevin McCarthy, was at times out of line.
“Occasionally there would be a little bit of an assertion that maybe was a little over the top from the speaker,” Biden said of the meeting with each party’s leaders in both chambers of Congress, according to NBC.
Biden said the three other participants were “very measured and low-key”.
Speaker McCarthy however accused Biden of having waited too long to open negotiations. “Everybody in this meeting reiterated the positions they were at. I didn’t see any new movement,” McCarthy said.
Republicans want spending cuts by the government in exchange for their support to increase the debt ceiling, but Democrats face serious voter issues in an election eve year as spending cuts would slash critical social services.
The Biden government has breached the $1.4 trillion debt ceiling limit prescribed by the treasury, whose Secretary Yanet Yellen, says she can last on payouts on interest until June 1, after which she will resort to extraordinary measures.
Such measures entail prioritising interest payments that could jeopardise payouts on social welfare programs such as senior citizen benefits.
If the US government defaults on interest payments and payouts under its various schemes, it could lead to a spiralling effect on the money markets world wide, as most countries’ governments and investors hold large amounts of Treasury bonds in their reserves.
Any default by the US government would lead to loss of investor confidence and a crash in the stock markets globally reducing the credibility of the treasury bonds.
Senate Majority Leader Chuck Schumer said that by not heeding the President’s appeal to keep spending cuts off the table for bargaining for support, to raise the debt ceiling limit Speaker McCarthy is endangering America and making it much harder to make progress on budget negotiations.
Biden’s budget is a whopping $1.7 trillion. But the more moderate Republican member and Senate Minority Leader Mitch McConnell, vowed to find a solution in time in national interests.
“The US is not going to default. It never has and it never will,” he said. “The solution lies between the one person in America who can sign a bill into law and the speaker of the House.”
McCarthy has proposed a counter fiscal measure that would trim Bidens budget to $1.5 trillion , cutting $20 billion . Democrats have opposed this.
The Congressmen and the White House are all on tenterhooks as the US Treasury Department has warned that the government will run out of money as soon as June 1, unless Congress raises its borrowing limit.
Media reports say that Biden and McCarthy have little time to overcome the impasse and both of them don’t enjoy any pre-existing relationship to give in to each other.
A compromise between the two has to appear on the table because the White House has so far refused to negotiate over the debt ceiling itself and both sides realise that an unprecedented economic calamity of a default should be avoided at all costs if the US has to retain its credibility in the global money markets.