Both sides are blaming the other for the situation

White House Negotiations: After G7, Speaker Biden is Going to Air Force One to Advise the Right Side of the GOP Debt Puzzle

The White House’s newest offer to House Republicans included a pledge to keep defense and nondefense spending levels the same, according to a source who is familiar with the negotiations. But Republicans have insisted on cuts to nondefense spending.

Biden’s top staffers are increasingly framing House Republicans as more interested in catering to the right wing of their caucus than reaching a consensus on how to lower the deficit and increase the debt ceiling.

“Last night in DC, the Speaker’s team put on the table an offer that was a big step back and contained a set of extreme partisan demands that could never pass both Houses of Congress,” White House Press Secretary Karine Jean-Pierre said in a statement issued early Sunday morning from Hiroshima.

Asked about invoking the Constitution’s 14th amendment to avoid default — an untested tool that the progressive wing of his party has urged — Biden said he was unsure whether legal challenges to such a move could be resolved in time to avert default. I think that’s a question that’s still unresolved,” he said.

We were at a point in time where we could agree, and that was what I was hoping for. We wouldn’t agree with the bill, but we would find a compromise. Even though the president was overseas, he fought to change places. I don’t understand that.

McCarthy said on Fox News that the president pivoted back. “He actually proposed spending billions more next year than we spend this year.”

Biden said he expected to speak to McCarthy on Air Force One. “My guess is he’s gonna want to deal directly with me in making sure we’re all on the same page,” Biden said.

Biden accused Republicans of being to blame for the stalemate after the G-7 concluded. “It’s time for the other side to move off extreme positions because much of what they’ve already proposed is simply, quite frankly, unacceptable” he said.

The Biden administration and House Republicans have each doubled down on their own red lines while simultaneously blaming the other side for stymied progress and stressing the need to avoid defaulting on the nation’s debt.

The designated negotiators for the two leaders had a series of stops and starts to their talks on Friday through the weekend — all while Biden was attending the G-7 summit in Japan. The president cut the second half of the trip short so he could be back in D.C. for continued negotiations with congressional leaders.

Dealing with the debt ceiling: Thebiden and Mccarthy, the next round-of-debt-ceiling-talks

McCarthy said he had been clear to him from the beginning that the team had to spend less money than they spent last year.

McCarthy has repeatedly said that including work requirements for able-bodied adults without dependents enrolled in federal safety net programs like food stamps is a must-have for his conference. That provision is included in a bill House Republicans passed last month that addresses raising the debt limit.

He said he’s not going to accept work requirements that go beyond what he’s used to. “But it’s possible there could be a few others, but not anything of any consequence.”

There have been indications that both parties will compromise on a potential deal in order to get the oil and gas and green energy projects done more quickly.

The United States could run out of money to pay its bills as early as June 1 according to the Treasury Secretary. That causes a lot of problems for both Houses of Congress. McCarthy said the House would need 72 hours to consider any bill before it heads to the Senate.

In 2011, during a similar standoff over raising the debt ceiling, the threat of a default alone sent markets into a freefall. Ratings agencies downgraded the U.S. from its top AAA credit rating to AA+ as a result of the debate.

Most economists agree an actual default could result in a recession. A default would severely affect financial markets, increase mortgage rates and interest rates on credit cards, could cause government workers and Social Security recipients to go unpaid, and could make it difficult for businesses and citizens to borrow money.

Source: https://www.npr.org/2023/05/22/1177437014/biden-and-mccarthy-gear-up-for-the-next-round-of-debt-ceiling-talks

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