Traveling to Valhalla, N.Y., Biden plans to call on Congress to raise the debt ceiling — the limit on how much the United States may borrow to pay its bills — without condition or delay. Congress must act to lift or suspend that borrowing cap as soon as June 1, or the country could default, which many economists say would plunge it into another recession.
“America is not a deadbeat nation. We pay our bills, and avoiding default is a basic duty of the United States Congress,” Biden told reporters Tuesday.
The president chose the Hudson Valley community for Wednesday’s appearance because it is a congressional district he won in the 2020 election that now is represented by a GOP lawmaker in the House, according to a White House official, who spoke on the condition of anonymity to describe Biden’s thinking.
Biden, the official said, intends to fault Republicans for adopting a bill last month that couples an increase in the debt ceiling with massive spending cuts and other policies, including a repeal of programs to combat climate change and cancel student loans. To the president and his top aides, the GOP approach threatens to decimate federal health-care, education, science, labor and health programs, harming American families’ finances.
“It’s important to the president that Americans across the country know what is at stake here,” White House press secretary Karine Jean-Pierre told reporters Tuesday in a preview of the president’s remarks.
But Republicans have held firm in their refusal to raise the debt ceiling without securing significant concessions. They did not budge after about an hour of conversation with the president at the White House this week, though aides plan to huddle again in the coming days — and Biden intends to sit down once more with McCarthy and his congressional counterparts on Friday.
“Everybody in this meeting reiterated the positions they were at,” McCarthy said on Tuesday. “I didn’t see any new movement.”
The stalemate threatens to generate new panic and frustration from Washington to Wall Street, more than a decade after a similar Republican effort to leverage the debt ceiling brought about a downgrade in the country’s credit rating, costing taxpayers more than $1 billion through higher interest payments.
This time, the exact deadline — known as the “x-date” — remains unclear. The Treasury Department warned last week that the United States could breach the debt ceiling as soon as June 1, even as it cautioned that its estimate hinges on tax receipts that have fluctuated greatly in recent months. Other estimates, including one issued this week from the Bipartisan Policy Center, have found the deadline could fall between June and August.
Absent congressional action, the government could default, potentially disrupting Social Security checks, veterans’ care and many other government services. That could upend the U.S. economy, possibly resulting in the loss of millions of jobs and other repercussions domestically and abroad.
With tensions running high, and time short, Biden opened new talks Tuesday with McCarthy and other top lawmakers: House Minority Leader Hakeem Jeffries (D-N.Y.), Senate Majority Leader Charles E. Schumer (D-N.Y.) and Senate Minority Leader Mitch McConnell (R-Ky.).
The roughly hour-long discussion came 97 days after Biden and McCarthy held their inaugural meeting, which the newly minted House speaker described at the time as productive. Top aides to McCarthy and other congressional leaders are set to continue discussing the debt ceiling with White House officials over the next few days, before the speaker and his counterparts return Friday for another meeting with Biden.
In an ominous sign, McCarthy exited the meeting Tuesday on a defiant note: He attacked Biden for failing to entertain his party’s proposal for spending cuts, recounting to reporters: “I asked him numerous times, ‘Are there some places we could find savings?’ He wouldn’t give me any. So I’m hopeful that we’ll be able to find them.”
Biden later countered that he had, in fact, presented a blueprint in the form of a 2024 budget, which aimed to reduce the deficit, chiefly through tax increases on wealthy Americans and corporations — an idea that Republicans flatly rejected. Instead, the president said he would be open to discussing significant spending cuts, just “not under the threat of default,” restating his preference that Congress turn to the issue later as part of the annual process to fund the government.
“We need to take the threat of default off the table,” Biden said.
