Key Takeaways:
- US President Joe Biden will meet with House Speaker Kevin McCarthy on May 9
- The meeting, which will include majority and minority leaders of both the branches of the Congress, will discuss the US Debt Ceiling crisis
- Treasury Secretary Janet Yellen warned that the US faces certain default by June 1 if the Congress does not increase or abolish the debt ceiling
YEREVAN (CoinChapter.com) — The United States is almost guaranteed to default by June if Congress does not address the debt ceiling crisis in the country. To prevent an extended economic crisis, President Joe Biden has called on the four top congressional leaders, including Republican House Speaker Kevin McCarthy, to the White House next week. The call for an urgent meeting comes amid warnings from Treasury Secretary Janet Yellen that indicate the government could run short of cash to pay its bills by as early as June 1.
The Treasury Secretary, in a subsequent warning letter to Congress, pressed for urgent action. Failing to address the situation, according to her, will result in the first default in the country’s history.
In January this year, after reports emerged that the US Government has reached its debt ceiling of $31.4 trillion, Yellen sent a similar plea to House Speaker McCarthy. However, the Republicans and the Democrats, locked in a long standoff, have yet to come to agree on a plan.
The May 9 meeting will be the first time Biden and McCarthy will meet since February to discuss the issue. Along with him, Biden has also invited House Democratic leader Hakeem Jeffries, Senate Majority Leader Chuck Schumer, and Republican leader Mitch McConnell.
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Biden unhappy with previous debt ceiling increase
Last month, the House Speaker succeeded in garnering enough support from House Republicans to pass the ‘Default on America Act‘. The bill would raise the government’s $31.4 trillion debt ceiling by an additional $1.5 trillion. It passed with a narrow 217 votes for and 215 against.
The legislation also imposed a 14% cut on government spending. The measure met the strong disapproval of President Joe Biden and his Democratic party colleagues.
Biden slammed the move. He claimed that the bill was about “cutting benefits for folks that they don’t seem to care much about.” Biden further vowed to use his veto power by refusing to sign it into law.
However, unlike the House, Democrats hold a majority in the US Senate. The Upper House of the Congress had rejected the bill, calling it “an outright ransom note.”
Joe Biden, meanwhile, insisted that Congress must unconditionally increase the debt ceiling. He further claimed that he would not meet with McCarthy to discuss the matter as his stance was “not negotiable”.
“The most important thing we have to do in that regard is to make sure that the threat by the Speaker of the House to default on the national debt is off the table,”
Biden had insisted.
The 2024 Presidential elections are knocking on the door. Joe Biden has already announced that he will seek a second term in office. Both parties are looking to solve the debt ceiling crisis on their terms. If the US defaults, it will have a disastrous impact on the global economy.
