 "Joe Biden")
House Speaker Kevin McCarthy, R-Calif., said on Tuesday he's increasingly concerned about President Joe Biden's unwillingness to negotiate on lifting the nation's borrowing authority, saying in a letter to the president that the White House position could "hold dire ramifications for the entire nation.
Rather than open direct talks on the debt ceiling, which the Democrats agree must be raised, Biden and his party's lawmakers are challenging Republicans to publicly present their own budget proposals something McCarthy has so far declined to do.
For now, the Treasury Department has resorted to extraordinary measures to avoid default on the nation's USD 31.4 trillion borrowing authority. But those measures will run out and put the US at risk of being unable to pay all of its bills possibly as early as June.
The White House has emphasised that Biden is not willing to entertain proposed cuts in programmes simply in exchange for lifting the debt limit. But McCarthy and Republicans are insisting he must for debt ceiling legislation to move ahead. The two sides are on a slow-motion collision course that could have negative implications for the economy.
Nearly two month ago, you and I sat down to discuss a path forward on the debt limit, McCarthy wrote in a letter to Biden dated on Tuesday.
Since that time, however, you and your team have been completely missing in action on any meaningful follow-up to this rapidly approaching deadline.
He also told Biden, Simply put: You are on the clock. It's time to drop the partisanship, roll up our sleeves, and find common ground on this urgent challenge. Please have your team reach out to mine by the end of this week to set a date for our next meeting.
Show your plans, the White House responds, believing that many voters would not look favourably on the proposed cuts.
It's time for Republicans to stop playing games, pass a clean debt ceiling bill, and quit threatening our economic recovery, said White House press secretary Karine Jean-Pierre. The president welcomes a separate conversation about our nation's fiscal future.
So far, only the House Freedom Caucus, which includes many of the House's most conservative members, has put forward a blueprint, which includes returning to fiscal year 2022 spending levels and allowing for 1 per cent annual growth after that for the next 10 years.
The plan also includes rolling back an estimated USD 400 billion in Biden's student loan relief and clawing back all unspent COVID-19 funds.
The White House has seized on those Freedom Caucus proposals, saying they would lead to draconian cuts that would endanger Americans' safety, such as cutting federal support for local law enforcement, scaling back rail safety inspections and jeopardising safety at US airports while increasing wait times at TSA security check points.
Republicans say voters gave them a mandate to reduce future deficits and put the country on firmer financial footing for coming decades. They are portraying the White House as inviting the standoff and hoping to shift the blame for any damage to the economy that may result. Rep. Scott Perry, R-Pa., chairman of the Freedom Caucus, said Monday evening he believes Biden is stalling here and wasting time and running down the clock.
If we get into a problem here, a crisis, I think Speaker McCarthy has been ready to go the whole time, Perry said.
But Democrats believe the pressure will continue to build on Republicans to allow for a clean debt ceiling increase with no spending-cut trade-offs and then lawmakers from the two parties can negotiate overall levels for federal agencies in spending bills for the coming fiscal year. The failures of Silicon Valley Bank in California and Signature Bank in New York have also added to concerns about the US economy.
McCarthy did list several prospects for reducing federal spending in his letter to Biden. Among them:
Reducing excessive non-defense spending to pre-inflationary levels and limiting growth in future years.
Reclaiming unspent COVID funds that he says have sat dormant for more than two years.
Strengthening work requirements for people without dependants who receive federal assistance.
Enacting policies to lower energy costs and secure the US-Mexico border.
McCarthy spoke about his letter to the president during Tuesday morning's closed door meeting of House Republicans, according to a person familiar the private session and granted anonymity to discuss it. McCarthy told his colleagues that Biden misled them about the budget negotiations which have essentially stalled since their first meeting on February 1, the person said.
Rep., Steve Scalise, the Republican House majority leader, said afterward that McCarthy has laid out his ideas. We're not just going to give the president another credit card to go max out, Scalise said.
Rep. Pete Aguilar, D-Calif., disparaged McCarthy's letter as consisting only of bullet points and called on House Republicans to both produce a budget and raise the debt limit, noting Congress lifted the ceiling three times during Donald Trump's presidency.
The full faith and credit of the United States government should not be in question," Aguilar said. "The United States pays its bills.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
