House Speaker Kevin McCarthy met with President Joe Biden at the White House Tuesday for talks over raising the debt ceiling, but the California Republican reported that little progress was made.
McCarthy has offered a budget proposal that would trade spending cuts for an increased borrowing limit, but Biden has shown little interest in negotiating. The president has his own budget proposal: a $6.9 trillion behemoth that would spend $1.8 trillion more than the government would take in. He claims that massive new taxes would make up the difference and even lower the deficit.
McCarthy was not enthusiastic about the talks:
“Everybody in this meeting reiterated the positions they were at. I didn’t see any new movement,” the speaker said. He said nothing has changed for Biden since they met on the same issue on Feb. 1.
“I’ve done everything in my power to make sure we will not default,” McCarthy said, arguing that both the White House and the Senate have not put forward any debt limit plans at all.
When asked directly if he saw progress in the meeting, the speaker said, “Well, the progress we made is, we were actually able to meet, so that’s a difference.”
🚨NO MOVEMENT at debt limit meeting
Speaker McCarthy tells me POTUS “pretty much” did not bring any proposals to this meeting and simply rejected what House R’s have done.
Biden and the Big Four will meet again on Friday, staff will talk in the meantime.
— Jacqui Heinrich (@JacquiHeinrich) May 9, 2023
As I reported on Sunday, Treasury Secretary Janet Yellen said the U.S. could run out of money as soon as June 1 if a deal is not struck. She warned of “financial and economic chaos” if that were to happen.
The consequences of a default would be disastrous, and the United States has never experienced one. The National Conference for State Legislators lays out some of the possible effects if the unthinkable were to happen:
The U.S. government could not create more debt by selling new bonds, thus halting the flow of federal funds. And, minting a trillion-dollar coin is purely theoretical. So, in a practical sense, Social Security and federal pension payments might cease; federal agencies would furlough employees; vital economic services such as the post office, Transportation Security Administration, U.S. Customs and the Federal Aviation Administration would stop without an emergency stopgap measure by Congress and the president.
McCarthy tweeted after the meeting that House Republicans have done their job—now it’s time for the Democrats to do theirs.
Just finished meeting at the White House. My position is clear and reasonable—House Republicans have done their job to avoid a default and responsibly raise the debt limit. Democrats must now do the same. https://t.co/AkR3DoagD9
— Kevin McCarthy (@SpeakerMcCarthy) May 9, 2023
Time is running out. The next steps, according to the Speaker:
McCarthy said the next steps on the issue is for staff-level meetings to take place over the rest of the week, and then to hold another meeting between Biden, McCarthy and other congressional leaders on Friday.
McCarthy defended the GOP position of insisting on spending cuts as a condition of raising the debt ceiling by pointing out that the House passed a debt limit bill, the Limit, Save, Grow Act that accomplishes both, while Senate Democrats have done nothing. Democrats have panned the House bill as a non-starter and want a clean debt ceiling increase.
Rarely in negotiations do both sides get exactly what they want. Biden however seems completely uninterested in compromise, and as Sen. Ted Cruz (R-TX) noted, the president is “playing roulette with the economy” with his intractability.
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