WASHINGTON听–听President Joe听叠颈诲别苍听and top lawmakers agreed on Tuesday to further听迟补濒办蝉听aimed at breaking a聽听辞惫别谤听raising the $31.4 trillion US听诲别产迟听limit, with just three weeks before the country may be forced into an unprecedented聽.
After about an hour of听迟补濒办蝉听in the Oval Office, Mr. Biden, a Democrat, and House of Representatives Speaker Kevin听惭肠颁补谤迟丑测, a Republican, committed their aides to daily discussions about areas of possible agreement as a default looms as soon as June 1.
Biden, Mr. McCarthy and the three other top congressional leaders were set to meet again on Friday.
Mr. Biden聽called the听迟补濒办蝉听“productive” and appeared to offer Republicans some possible compromises, including taking a “hard look” for the first time at clawing back unspent coronavirus relief funds to reduce government spending.
But he repeated that Republicans must take the threat of default off the table. And he did not rule out eventually invoking the聽 to the US Constitution, an untested approach that would seek to declare the听诲别产迟听limit unconstitutional. Doing so would require litigation, he said, but is an option he may study in the future.
“There’s a lot of politics and posturing, and that’s going to听肠辞苍迟颈苍耻别听for a while,” Mr. Biden聽said, but political leaders are “getting to work.”
“Everyone in the meeting understood the risk of default,” Mr. Biden聽said.
Mr. McCarthy聽emphasized a lack of progress after the meeting. “I didn’t see any new movement,” Mr. McCarthy聽told reporters, complaining that听叠颈诲别苍听didn’t agree to听迟补濒办蝉听until time was running out. “That’s not a way to govern,” he said.
But he did say Mr. Biden聽indicated that he was open to discussing reforms to the permitting process for new energy projects as part of the听迟补濒办蝉.
Economists warn that a lengthy聽聽could send the American economy into a deep recession with soaring unemployment while聽 a global financial system built on US bonds. Investors are bracing for .
Mr. Biden聽is calling on lawmakers to raise the federal government’s self-imposed borrowing limit聽. Mr. McCarthy, whose party has a slim majority in the House, has said his chamber will not approve any deal that doesn’t dramatically cut spending to address a growing budget deficit and signaled that he doesn’t see a short-term fix.
Past听诲别产迟听肠别颈濒颈苍驳听fights have typically ended with a hastily arranged agreement in the final hours of negotiations, thus avoiding a default. In 2011, the scramble prompted a historic downgrade of the country’s top-notch credit rating. Veterans of that battle warn the current situation is riskier because political divides have widened.
Tuesday’s meeting was the first between Mr. Biden聽and Mr. McCarthy聽since Feb 1. It was聽聽ahead of what聽is expected to be a fraught period in Washington with the approach of June, when the US Treasury predicts the country could be forced to default on some听诲别产迟s.
Earlier Tuesday, Mr. McCarthy appeared to close the door to a short-term solution that’s been widely discussed on Capitol Hill: lifting the听诲别产迟听肠别颈濒颈苍驳听through September to allow more time for agreement. Mr. Biden聽specifically said after the meeting that he was not ruling out such a short-term arrangement.
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Neil Bradley, top policy official at the US Chamber of Commerce, the nation’s largest business association, said it was positive that the two sides would听肠辞苍迟颈苍耻别听meeting. “But we cannot stress enough that time is short, with each passing day increasing the risk for a misstep resulting in a default.”
Few countries in the world have听诲别产迟听肠别颈濒颈苍驳听laws, and Washington’s periodic lifting of the borrowing limit merely allows it to pay for spending Congress has already authorized.
Mr. Biden聽would agree to a separate discussion on the budget but not tied to the听诲别产迟听ceiling, the White House said.
The start of active听迟补濒办蝉听could nonetheless聽聽the nerves of investors who last week forced the federal government to pay its highest interest ever for a one-month听诲别产迟听issue.
Prices for short-term Treasury bills fell on Tuesday as investors sold off听诲别产迟听that could come due around the time the US听诲别产迟听limit could be hit.
Mr. Biden‘s foreign travel plans and House and Senate recesses mean there are聽聽when all three parties are scheduled to be in town before June 1.
Treasury Secretary Janet Yellen on Monday said a failure to raise the听诲别产迟听limit would聽 the US economy and weaken the dollar as the world’s reserve currency. Treasury cash is dwindling as the extraordinary measures it is taking are exhausted. – Reuters
