Key Takeaways:
- US President Joe Biden met with all Congressional leaders to discuss the debt ceiling crisis.
- The US Treasury Department has warned that the Government will default by June 1, 2023
- The meeting ended without any breakthrough.
YEREVAN (CoinChapter.com) — There seems to be no end to the debt ceiling crisis in the United States. President Joe Biden met with congressional leaders, including House Speaker Kevin McCarthy, to negotiate an agreement that would prevent the country from its first default. However, the meeting, held in the White House, failed to yield any results.
Following the sit down with the US President, McCarthy did not seem optimistic. In a statement just after the meeting concluded, the Republican leader said he “didn’t see any new movement” toward ending the installment over the issue.
According to McCarthy, everybody at the meeting reiterated their positions and didn’t budge.
“Unfortunately, the President has waited 97 days without ever meeting. Every day I asked if we could meet, and he said no. The House has raised the debt ceiling in a responsible manner, curbed our spending at the same time to bring us economic growth,”
McCarthy said, calling on Senate majority leader Chuck Schumer to approve the bill in the upper House too.
The installment over the Debt Ceiling continues
On several occasions, the US Treasury Department has warned that the US Government could run out of cash soon if Congress does not raise or abolish the country’s debt ceiling. In a recent letter to lawmakers, Treasury Secretary Janet Yellen indicated a default could come as early as June 1.
The Biden Administration has demanded that Congress raise the ceiling without any preconditions. Last month, the Republican Party-led House of Representatives narrowly passed a bill to increase the debt ceiling.
However, despite President Biden’s demands, it came with caveats, including massive budget cuts. So while the Democrat-majority Senate proclaimed it dead on arrival, the White House said President Joe Biden wouldn’t sign it even if it reached his table.
As far as McCarthy is concerned, he believes that the Republican-controlled House has done its job. It is up to the Democrats now to take steps to prevent a default.
Joe Biden optimistic after the meeting
Although Speaker Kevin McCarthy did not seem happy with the outcome of the meeting, the US President was satisfied. Biden described the talks as “productive,” claiming to be optimistic about the deadline.
He further assured that he was “absolutely certain” that the US Government would pay its bills on time.
“I made clear during our meeting that default is not an option. I repeated that time and again. America is not a deadbeat nation. We pay our bills and avoiding default is a basic duty of the United States Congress. I’m prepared to begin a separate discussion about my budget and spending priorities but not under the threat of default,”
Biden said after the hour-long meeting in the Oval Office.
However, Biden was not the only one who was optimistic. Senate Minority Leader Mitch McConnell also expressed similar sentiments. Expressing hope that the two parties will finally reach an agreement, he
“There are probably some places we can agree, some places we can compromise… Let me first make the point: The United States is not going to default. It never has, and it never will,”
McConnell assured.
The Minority Senate leader might be as hopeful as he wants, but it won’t be up to him. The Democrats control the Upper House. So until their leader, Chuck Schumer, takes steps, the installation will continue.
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Joe Biden should stop the fear-mongering around expenditure cuts
The Republicans raised the debt ceiling by an additional $1.5 trillion after the Biden Administration reached the $31.4 trillion debt ceiling in January. However, after they demanded a 14% spending cut, Democrats began to spread fear among the public.
They believe cutting government spending would automatically harm social benefits, such as Medicare and Medicaid. However, it doesn’t have to be that way.
Kevin McCarthy and his team have asked Joe Biden to agree to negotiations on terms that would harm citizens the least. However, he cannot bring the country to the verge of default by brushing off the spending cuts as anti-people.
The US Senate should also pull up its socks and agree to spending cuts. They cannot demand that the Republicans be the only ones to compromise. Such an attitude will further deepen the debt ceiling crisis.
With only two weeks before the June 1 deadline, the country will watch to see what happens in the coming days. Until then, the Biden Administration is in trouble.
Should the US default, the result will be disastrous. As many as 7 million people could lose their job. The economy will also slip into a long recession. With the elections knocking on Joe Biden’s door next year, that is not an outcome he hopes.
