Debt talks back on with Biden, McCarthy meeting Monday

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President Joe Biden and Speaker Kevin McCarthy are preparing for a Monday showdown at the White House as the clock ticks toward a June 1 deadline to keep the country from defaulting on its debt.

Biden got the talks rolling again – after they stalled over the weekend – when he called McCarthy from Air Force One as he headed back to the United States after attending the G7 summit in Japan.

The speaker described the conversation as ‘productive.’

McCarthy sounded optimistic when he spoke to reporters on Capitol Hill, saying, after his conversation with the president, he was hopeful a deal would come.

‘Time is of the essence,’ he noted.

President Joe Biden called House Speaker Kevin McCarthy from on board Air Force One as he traveled back to the United States from Japan. Biden board Air Force One at U.S. Marine Corps Air Station Iwakuni after attending the G7

President Joe Biden called House Speaker Kevin McCarthy from on board Air Force One as he traveled back to the United States from Japan. Biden board Air Force One at U.S. Marine Corps Air Station Iwakuni after attending the G7

President Joe Biden called House Speaker Kevin McCarthy from on board Air Force One as he traveled back to the United States from Japan. Biden board Air Force One at U.S. Marine Corps Air Station Iwakuni after attending the G7

House Speaker Kevin McCarthy, photographed in the Capitol Rotunda on Sunday, described his conversation with Biden as 'productive.' Biden and McCarthy will meet in Washington Monday after Biden returns from Japan

House Speaker Kevin McCarthy, photographed in the Capitol Rotunda on Sunday, described his conversation with Biden as 'productive.' Biden and McCarthy will meet in Washington Monday after Biden returns from Japan

House Speaker Kevin McCarthy, photographed in the Capitol Rotunda on Sunday, described his conversation with Biden as ‘productive.’ Biden and McCarthy will meet in Washington Monday after Biden returns from Japan

Shortly after the two leaders spoke, talks resumed on the staff level. White House aides Shalanda Young, Louisa Terrell and Steve Ricchetti met with Republican Reps. Garret Graves and Patrick McHenry – who make up McCarthy’s team – for two and a half hours on Capitol Hill Sunday evening.

‘We’ll keep working tonight,’ Ricchetti told reporters as the teams left the speaker’s office.

The Treasury Department, meanwhile, is sticking to its June 1st deadline to raise the country’s borrowing limit, now at $31 trillion, so the United States can pay its bills. Otherwise it will default on its debt.

‘I think that that’s a hard deadline,’ Treasury Secretary Janet Yellen said on NBC’s Meet the Press. ‘It’s hard to be absolutely certain about this, but my assessment is that the odds of reaching June 15th while being able to pay all of our bills is quite low.’

A US default could trigger a global wide economic recession. When talks broke down on Friday, the stock market plummeted.

Any deal must be bipartisan, both sides have acknowledged. Republicans hold a mere-five seat majority in the House and Democrats in control of the Senate.

Negotiations now are focused on spending cuts.

Graves said that the talks were focused on the extent and duration of new restrictions on federal spending.

Shalanda Young, director of the Office of Management and Budget, a top mediator for President Joe Biden in the debt limit talk, arrives back on Capitol Hill Sunday as talks resumed

Shalanda Young, director of the Office of Management and Budget, a top mediator for President Joe Biden in the debt limit talk, arrives back on Capitol Hill Sunday as talks resumed

Shalanda Young, director of the Office of Management and Budget, a top mediator for President Joe Biden in the debt limit talk, arrives back on Capitol Hill Sunday as talks resumed

Steve Ricchetti, counselor to the president and a top mediator for President Joe Biden in the debt talks arrives back on Capitol Hill Sunday after negotiations hit a hiccup earlier in the weekend

Steve Ricchetti, counselor to the president and a top mediator for President Joe Biden in the debt talks arrives back on Capitol Hill Sunday after negotiations hit a hiccup earlier in the weekend

Steve Ricchetti, counselor to the president and a top mediator for President Joe Biden in the debt talks arrives back on Capitol Hill Sunday after negotiations hit a hiccup earlier in the weekend

Once that is in place, he noted: ‘everything else cascades.’

McCarthy said after his call with Biden that ‘I think we can solve some of these problems if he understands what we’re looking at.’

‘But I’ve been very clear to him from the very beginning. We have to spend less money than we spent last year,’ he said.

Biden, meanwhile, expressed exasperation with Republicans, calling on them to move from their ‘extreme positions’ and to realize any deal must be bipartisan.

The president also said he would consider using the 14th amendment to solve America’s debt limit even as he conceded it is probably too close to the June 1st default deadline to use it in this round.

‘I’m looking at the 14th Amendment as whether or not we have the authority,’ he said at a press conference in Hiroshima on Sunday evening.

‘I think we have the authority. The question is could it be done and invoked in time that it would not be appealed and, as a consequence, pass the date in question and still default on the debt?’

Biden said he would be open to exploring the option in the courts to see if they would rule it legal or not.

The president had previously ruled out using the constitutional amendment – which some legal scholars argue has a clause that would make it unconstitutional for the U.S. to fail to make its debt payments – to raise the debt ceiling.

Biden also accused Republicans of trying to tank the debt talks to hurt his re-election bid, conceded he may be able to stop them from making a default, and said he’ll be stepping in to deal with Speaker Kevin McCarthy one-on-one.

Treasury Secretary Janet Yellen (right) reiterated to NBC's Chuck Todd (left) on Meet the Press Sunday that June 1 remains the default deadline as debt talks come down to the wire

Treasury Secretary Janet Yellen (right) reiterated to NBC's Chuck Todd (left) on Meet the Press Sunday that June 1 remains the default deadline as debt talks come down to the wire

Treasury Secretary Janet Yellen (right) reiterated to NBC’s Chuck Todd (left) on Meet the Press Sunday that June 1 remains the default deadline as debt talks come down to the wire

How 14th Amendment Applies to US Debt

Many legal scholars suggest a clause in the 14th Amendment that says the ‘validity of the public debt, authorized by law … shall not be questioned’ could apply to the debt limit.

Legal experts argue that Section 4 of the 14th Amendment allows the Treasury Department to keep borrowing money past the debt limit and that it would be unconstitutional for the U.S. to fail to make payments.

Some Democrats are urging Biden to invoke the constitutional amendment to keep the country from defaulting.

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In his press conference, Biden had tough talk for Republicans, slamming them for taking an ‘extreme position’ in the talks and said he would speak to McCarthy from Air Force One as he flew home from Japan.

‘My guess is he´s going to want to deal directly with me in making sure we´re all on the same page,’ Biden said of McCarthy, adding that he believed a compromise remained within reach.

‘I´m hoping that Speaker McCarthy is just waiting to negotiate with me when I get home. … I´m waiting to find out.

The White House had accused House Republicans of taking the talks backwards by refusing their offer to cut spending and instead make what Democrats call outrageous demands to cutting the federal budget.

Biden, who announced he’s seeking a second term in office, indicated he thinks politics is at play.

He said if the nation defaults then ‘Biden would take the blame and that’s one way to make sure Biden is not reelected.’

‘On the merits based on what I’ve offered, I would be blameless. On the politics of it, no one would be blameless,’ he said.

He called on Republicans to compromise.

‘It’s time for Republicans to accept that there is no bipartisan deal to be made solely – solely – on their parts and terms. They have to move as well,’ he said.

He also expressed some exasperation with the other side, saying he can’t ‘guarantee that they would enforce a default by doing something outrageous.’

Earlier debt negotiations took a downward turn as both sides accused the other of negotiating in bad faith.

Republicans rejected an offer from the Biden administration that would have kept both non-defense and defense discretionary spending flat next year compared with the 2023 fiscal year, according reports.

McCarthy said he wants to cut non-defense spending in comparison to what was spent in previous years.

Democrats argue that keeping those numbers flat amounts to an effective cut because of inflation, at a rate of up to 5%.

The White House argued that, with inflation, that would amount to a 5% cut in spending.

The two sides are fighting over spending cuts. Republicans are demanding them in exchange for raising the debt limit.

House Republicans passed a bill that would roll back spending to fiscal 2022 levels and impose a 1% cap on spending going forward for a decade. But it was dead on arrival in the Democratic-controlled Senate.

The White House has rejected the GOP demands as too extreme but has expressed a willingness to cut some spending.

In order to get a deal, the spending cuts must be significant enough to be accepted by conservative Republicans but also acceptable to Democrats, who hold the Senate and will likely need to provide between 50 and 100 votes in the House.

Republicans, in addition to spending cuts, want to increase defense spending in the 2024 federal budget.

Democrats argue in order for that to happen social programs, education and healthcare would have bear the burden of cuts. The progressive wing of the Democratic Party would not support that.

Additionally, Republicans have refused to roll back the Trump-era tax breaks on corporations and wealthy households as Biden has proposed.

Content source – www.soundhealthandlastingwealth.comHealthly Days

Disclaimer: This story is auto-aggregated by a computer program and has not been created or edited by Healthly Days.
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