Biden and McCarthy struggle for compromise
Both camps remain firm: In the dispute over the US debt limit, the next crisis meeting between the government and Republicans in the White House is over.
The breakthrough did not materialize – and »Day X« is approaching.
No solution has yet been found with regard to the impending default in the United States. A few days before the expected deadline, a new top-level talk between President Joe Biden and the opposition Republicans remained without a breakthrough.
The Republican chairman of the House of Representatives, Kevin McCarthy, said on Monday evening (local time) after the meeting in the White House that the conversation had been “productive”. But there is no “agreement” yet.
Biden’s government and the opposition Republicans have been arguing for months about raising the debt ceiling. Without an agreement, the USA is threatened with insolvency for the first time in its history at the beginning of June, with potentially devastating economic and financial consequences far beyond the country. Treasury Secretary Janet Yellen has repeatedly warned that as early as June 1st could be “Day X”.
Republicans only want to approve a debt ceiling hike in exchange for billions in government spending cuts. They demand that less money be spent in the 2024 budget year than in the current budget year. The White House has proposed freezing spending levels and raising taxes on rich and large corporations, but Republicans are opposed.
“I feel like we had a productive discussion,” McCarthy said after his meeting with Biden. “We don’t have an agreement yet, but I felt the discussion was productive in areas where we disagreed.” The “tone” was also better than at previous meetings. Representatives from both sides are now “working through the night” to reach a rapprochement, McCarthy said. He himself now wants to speak to Biden “every day”.
In view of the debt dispute, Biden canceled planned visits to Papua New Guinea and Australia after the G7 summit in Hiroshima, Japan. Instead, he flew back to the United States from Japan on Sunday.
Biden is considering radical moves
The United States had already reached the statutory debt limit of just under $31.4 trillion (around €29 trillion) in January. Since then, the US government has been using “extraordinary measures” to prevent insolvency, but the options for doing so are soon exhausted.
The US debt limit has been suspended or raised dozens of times by presidents of both parties over the past few decades, with bipartisan majorities. This year, however, the Republicans are using their new majority in the House of Representatives, which they achieved in the midterm elections in the fall of 2022, for political power games.
Biden is even considering bypassing Congress and simply ignoring the debt limit. He could invoke the 14th Amendment of the US Constitution, according to which the “legal validity” of the United States national debt “shall not be questioned”.
However, such an approach would be unprecedented in US history and legally questionable. Biden and his Treasury Secretary Yellen have therefore been skeptical.
