US Pres Biden, House Speaker McCarthy meeting on debt ceiling ends with no ‘movement,’ talks to continue

United States President Joe Biden held a meeting with top lawmakers at the Oval Office, on Tuesday (May 9) in a bid to break a deadlock over raising the $31.4 trillion debt limit, as the country faces the risk of an unprecedented default. After the high-stakes meeting, Republican House Speaker Kevin McCarthy said that there was no new “movement” which essentially indicated that no agreement was reached. 

The meeting was also attended by Senate Republican leader Mitch McConnell and the top Democrats in Congress, House Minority Leader Hakeem Jeffries and Senate Majority Leader Chuck Schumer. 

This comes after Treasury Secretary Janet Yellen warned that Washington could run short of cash to pay all of the government’s bills as soon as June without a debt limit increase. The top lawmakers will continue talks on Friday. 

The high-stakes meet

The high-stakes meeting between lawmakers lasted about an hour, while the aides may continue negotiations as soon as Tuesday night on the federal budget. Biden called the meeting “productive” while McCarthy said, “I didn’t see any new movement”. 

“Everyone in the meeting understood the risks of default,” said the US president, adding that the House speaker, during the meeting said, that the country will not default on its debt. “We need to take the threat of default off the table,” said Biden after the meeting, adding that default “is not an option”. 

McCarthy, after the meeting talking to reporters and seemingly complaining about the US president said that Biden did not agree to talks until time was running out and, “That’s not a way to govern.” 

Furthermore, Schumer, a Democrat, blamed McCarthy for refusing to take default off the table and that the House speaker was “greatly endangering America.” While Jeffries said Republicans had waited for weeks to publish a budget and that “extreme” Republicans “have indicated that they are willing to take us down the path of default.”

On the other hand, McConnell blamed Biden for not being serious about negotiations.

What are Biden’s options now?

According to reports, officials in the White House have discussed whether Biden has the authority to lift the debt limit by invoking the 14th Amendment of the US Constitution, on his own. However, in an interview, last week the US president said that there are not there yet. 

The Republican-led House of Representatives passed a bill, in April, that would raise the debt ceiling in exchange for budget cuts to healthcare for the poor, transportation, and so on. The bill would implement $4.5 trillion in spending cuts in exchange for a $1.5 trillion increase in the US debt limit. 

However, it is very unlikely to pass the Democrat-controlled Senate while the White House has previously said that the president would veto the legislation. 

Notably, as the speaker of the House McCarthy has primary control over US budget issues and Biden has said he would not accept these deep cuts, the impasse has raised the possibility of Congress and the White House overseeing the first national debt default. 

Biden might cancel Asia trip

After the meeting, Biden indicated that he might cancel his upcoming trip to Asia for Group of Seven (G7) meetings. When asked about the meetings he said that it is “possible” that he would not make the trip, “If somehow we got down to the wire and still haven’t resolved this… I would not go,” the US president told reporters, as quoted by news agency AFP. 

In a letter addressed to the House speaker and other lawmakers, earlier this month, Yellen had warned, “Our best estimate is that we will be unable to continue to satisfy all of the government’s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.”

She added, “It is impossible to predict with certainty the exact date when Treasury will be unable to pay the government’s bills, and I will continue to update Congress in the coming weeks as more information becomes available.”

Yellen has also recently said that unless Congress acts in the coming weeks, “financial and economic chaos would ensue.” If the debt ceiling is not raised or suspended by Congress the government risks defaulting on payment obligations which would have a significant impact on the US economy.

(With inputs from agencies) 

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