President Joe Biden met with congressional leaders on Tuesday following a three-month deadlock between the White House and Congress over the debt ceiling, which has threatened a default on the nation’s financial obligations.
Following the meeting with House Speaker Kevin McCarthy and other congressional leaders, Biden told reporters that the meeting was “productive” and that he would do everything in his power to prevent the United States from defaulting on its debt obligation.
“I made it clear during our meeting that default is not an option,” Biden said. “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.”
“We agreed to continue our discussions and we’re going to meet again on Friday,” Biden said, adding that until then, staff from both sides will meet daily to discuss progress.
The current limit on federal borrowing in the United States is $31.4 trillion. And although the nation has never defaulted on its debt before, according to Treasury Secretary Janet Yellen, that could change as soon as early June if the debt limit is not lifted.
“Everybody in this meeting reiterated the positions they were at,” the House Speaker told reporters outside the White House after the meeting. “I didn’t see any new movement.”
Noting that he was “hopeful” that the two sides might find areas of common ground, McCarthy went on to say, “I think the best thing that we can do is find places where we can eliminate waste, find places that we can grow this economy, and that’s exactly what the House bill does.”
In April, House Republicans passed the “Limit, Save, Grow Act,” which would cap federal spending for fiscal year 2024 at 2022 levels to help offset raising the debt ceiling by $1.5 trillion, or through March 2024.
However, the White House dismissed the GOP proposal, accusing House Republicans of “manufacturing a crisis” and failing to do their job.
Biden accused McCarthy of proposing “a very different way forward.”
“I’m not sure. I don’t think they’re sure exactly what they’re proposing,” Biden said after the meeting, referring to the Republican plan to cut spending.
Biden, however, did not rule out a short-term extension of the debt ceiling.
“I’m not ruling out anything. … One thing that I’m ruling out is default,” Biden said, adding that he won’t approve massive spending cuts.
Biden also told reporters that there has been internal White House debate on whether unilateral action, such as invoking the 14th Amendment, is possible to resolve the debt standoff.
Section 4 of the 14th Amendment states, “The validity of the public debt of the United States, authorized by law … shall not be questioned.”
The amendment, which was ratified in the wake of the Civil War, ensures that the United States will always pay its debts.
“I don’t think that solves our problem now,” Biden said, emphasizing that the court must rule on it.
“In the meantime, without an extension, it would still end up in the same place,” Biden explained.
On May 1, Yellen delivered a letter (pdf) to Congress, stating that the Treasury Department may run out of extraordinary measures and would be unable to meet the government’s obligations as early as June 1.
The Congressional Budget Office made a similar prediction last week, indicating that the “extraordinary measures invoked by the Treasury secretary will be exhausted by June 2023.”
When asked if he has confidence in McCarthy, Biden stated that the speaker may lack flexibility.
“I trust Kevin will try to do what he says,” Biden said. “I don’t know how much leeway Kevin McCarthy thinks he has in light of the fact that … it took 15 votes for him to acquire the speakership. And apparently he had to make some serious concessions to get it from the most extreme members of his party.”
Lawrence Wilson and Samantha Flom contributed to this report.
From The Epoch Times