Speaker McCarthy: Debt Deal Needed Soon to Avoid Default

But he didn't see 'new movement' in talks with Biden
By Newser Editors and Wire Services
Posted May 9, 2023 8:07 PM CDT
Speaker McCarthy: Debt Deal Needed Soon to Avoid Default
President Biden speaks to the media following a meeting with Congressional leaders about preventing a first-ever government default, Tuesday, May 9, 2023 in the Roosevelt Room at the White House.   (AP Photo/Susan Walsh)

President Biden and congressional leaders confronted each other on the debt limit impasse Tuesday, ending their meeting with no breakthrough but agreeing to meet again this week to try to avert the looming risk of an unprecedented government default. Speaking at the White House, Biden described the talks as "productive" even though House Speaker Kevin McCarthy said after the high-stakes Oval Office meeting that he "didn’t see any new movement" toward resolving the stalemate, the AP reports. Biden and the congressional leaders are to meet again on Friday.

McCarthy said Tuesday that a federal debt deal with President Joe Biden is needed by next week if Washington hopes to avert a catastrophic national default as a June 1 deadline nears when money could run short for paying America's bills, per the AP. Speaking ahead of the White House meeting, McCarthy said he sees no reason why all sides can't come to an agreement quickly over Republican ideas for cutting spending in exchange for raising the debt limit. "I don't think it's that difficult," McCarthy told reporters. Biden and the Democrats don’t see it that way. The president insists that raising the debt limit is nonnegotiable.

Default, officials say, would have sweeping impacts, threatening to disrupt Social Security payments to retirees, destabilize global markets and tilt the nation into a potentially debilitating recession. Because the House Republican bill does not spell out which federal programs would be cut, Democrats have gone on offense warning of steep hits to popular programs. The Democratic-aligned group House Majority Forward announced a $1 million campaign Tuesday amplifying such cuts, while the House Republicans' campaign committee countered with its own effort portraying Democrats as “addicted to spending.”

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Republicans came to the White House hoping to negotiate sweeping cuts to federal spending in exchange for allowing new borrowing to avoid default. Biden, on the other hand, reinforced his opposition to allowing the country’s full faith and credit to be held "hostage" to negotiations—while affirming his willingness to hold talks on the budget only after default is no longer a threat. "I told congressional leaders that I’m prepared to begin a separate discussion about my budget, spending priorities, but not under the threat of default," Biden said. Outside the White House, McCarthy said, "I asked the president this simple question, Does he not believe there’s any place we could find savings."

(More Kevin McCarthy stories.)

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