Heat
President Joe Biden warned Sunday that congressional Republicans could do something “outrageous” to force the US to default on its loans, as talks between congressional Republicans and the White House on whether to raise the debt ceiling remain uncertain. and the deadline to avoid on June 1 looms as the standard.
President Joe Biden gestures during a news conference in Hiroshima, Japan, Sunday, May 21, 2023. … [+]
Key facts
During a news conference after the Group of 7 summit in Japan, Biden described demands by congressional Republicans for spending cuts in exchange for raising the debt ceiling as “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 U.S. would not go bankrupt, which would have repercussions around the world, but he said earlier in a news conference that the United States “has never defaulted on our debt and never will.”
Biden also reiterated that he is considering bypassing Congress and continuing to pay the nation’s bills by invoking an obscure clause in the 14th Amendment that says “the public debt of the United States … shall not be questioned,” but pointed to potential legal challenges and lack of time.
Crucial Quotes
“I can’t guarantee that they won’t force a default by doing something outrageous,” Biden said at a news conference, referring to congressional Republicans who have not backed down on their demands to cut federal spending.
What to watch out for
The Treasury estimated that the United States could become unable to pay its bills as early as June 1, causing a catastrophic economic failure. In an interview Sunday on NBC Meet the journalists, Treasury Secretary Janet Yellen said the projection was still accurate, adding that the US was unlikely to reach June 15 – when tax revenue is expected to rise – and be able to pay all its bills. Yellen noted “uncertainty about tax revenue” and indicated that continued negotiations over whether to raise the debt ceiling could affect payments for government services such as Medicaid and Social Security, among others.
Chief critic
House Speaker Kevin McCarthy said “nothing has been agreed” during an interview with Fox News Sunday Morning Futures. McCarthy has publicly opposed the 14th Amendment strategy that Biden has been teasing. Earlier this month, McCarthy said the Civil War-era amendment was not discussed in a meeting the two men had, but he described that method of dealing with the debt ceiling as a failure.
Tangnet
The group of 11 senators, led by Bernie Sanders (I-Vt.), urged On Friday, Biden will use the Civil War-era amendment to prevent the US from defaulting on its debt. Invoking the amendment would allow the government to continue issuing debt without congressional approval — but that’s a legally untested strategy that could trigger court challenges. The senators also accused Republicans of making it “seemingly impossible to reach a bipartisan budget deal at this time” because of their demands to raise the federal borrowing limit.
Key background
Congressional Republicans and the White House have been at odds since January over whether to raise the government’s borrowing limit above the current $31.4 trillion. Appointed negotiating teams have been holding talks for the past week as the parties try to move towards a solution. The Republicans’ goal is to cut federal spending and undo Biden’s policy priorities. The White House wants to raise the debt ceiling without conditions. Republicans made some strides last month after the House passed legislation to raise the debt ceiling by $1.5 trillion through March of next year with a number of spending cuts, but the bill has no prospect of passing the Senate. Biden has said he would be open to agreeing to one of those conditions — raising the age at which welfare recipients must work to receive food stamp benefits — but some Democrats are unhappy with that potential concession.
Further reading
Critical debt talks are back after a sudden hiatus, says McCarthy (Forbes)
Democrats urge Biden to avoid GOP demands on debt ceiling by using Civil War-era amendment (Forbes)
Social work requirements are emerging as a central issue in the fight against the debt ceiling (Forbes)
More Democrats are criticizing Biden in the debt ceiling talks (Forbes)
Forbes – Business