President Biden and Congressional Leaders Meet to Discuss Federal Debt Ceiling Standoff
President Joe Biden is set to meet with House Speaker Kevin McCarthy and other key legislators on Friday to discuss the federal debt ceiling. This comes after their meeting earlier this week, where McCarthy stated that leaders would meet with Biden again on Friday. The White House and congressional Republicans are in a standoff over how to raise or suspend the debt ceiling, which caps the total amount of money that the US can borrow to fund the federal government.[0] Failure to reach an agreement promptly may lead to the United States defaulting on its debts, resulting in a significant financial catastrophe.[0] As early as June 1, a default could occur, according to the recent announcement made by Treasury Secretary Janet Yellen.[1]
President Joe Biden and the Democrats are demanding that Congress approve a debt ceiling increase that is not tied to any other conditions, in order to ensure its passage. Meanwhile, Republicans are keen to approve any debt ceiling increase only if spending cuts are implemented, and some have expressed their unwillingness to make concessions on this issue.[2] House Republicans have passed a debt limit plan that includes spending reductions, but Biden and congressional Democrats have insisted on passing a clean increase on the debt limit before addressing a framework for spending.
President Biden has been considering using the 14th Amendment to unilaterally raise the debt ceiling without the help of Congress.[3] Legal experts have stated that the 14th Amendment's Section 4, which states that the “validity of the public debt of the United States, authorized by law… shall not be questioned,” makes the debt ceiling illegal. This is because it jeopardizes the legitimacy of the country's public debts by increasing the likelihood of a default.[4] However, Biden has cast doubts on whether this could work, saying it would “have to be litigated and in the meantime without an extension it’d still end up in the same place.”
The meeting on Tuesday saw all four corners of congressional leadership come together to discuss the debt limit, with McCarthy being the key negotiator from Capitol Hill.[5] He heads to the White House satisfied that House Republicans have already done their part, passing a package of spending cuts coupled with a one-year debt ceiling increase.[5] However, beyond that Democratic negotiating position, Senate Majority Leader Chuck Schumer holds another card: the House-passed bill that marries significant spending cuts with a debt limit increase wouldn’t survive the Democratically controlled Senate and would likely lose some Senate GOP votes, too.[5]
Both sides agree that a path forward to raising the debt ceiling remains unclear.[2] However, they have agreed to “have a discussion about a path forward around the budget, and the appropriations process, and everyone agreed,” according to House Minority Leader Hakeem Jeffries.[6] Progress has been made, but the threat of default still looms.[6] Biden has reiterated that he has no intention of engaging in discussions regarding the debt ceiling and would support independent negotiations concerning the budget and yearly expenditures.[7] Default is not an option, Biden says following meeting on debt ceiling.
0. “Debt ceiling: What you need to know as US risks default as soon as June 1” Vox.com, 9 May. 2023, https://www.vox.com/2023/5/9/23715753/debt-ceiling-limit-default-deal-crisis
1. “Markets brace for potential debt default as deadline looms” Yahoo Finance, 9 May. 2023, https://finance.yahoo.com/news/markets-brace-for-potential-debt-default-as-deadline-looms-124355292.html
2. “Debt ceiling negotiations stalled after Biden meeting with McCarthy” CNN, 10 May. 2023, https://www.cnn.com/politics/live-news/debt-ceiling-meeting-biden-mccarthy-05-09-23/index.html
3. “Biden says he’s considering 14th Amendment as debt ceiling option” The Hill, 9 May. 2023, https://thehill.com/homenews/administration/3996832-biden-says-hes-considering-14th-amendment-as-debt-ceiling-option/
4. “Biden says he's exploring 14th amendment to defuse debt ceiling standoff” POLITICO, 9 May. 2023, https://www.politico.com/news/2023/05/09/biden-says-hes-exploring-14th-amendment-to-diffuse-debt-ceiling-standoff-00096089
5. “What each congressional leader wants out of the big Biden meeting — and what they'll likely get” POLITICO, 9 May. 2023, https://www.politico.com/news/2023/05/09/debt-limit-meeting-biden-mccarthy-congress-00095929
6. “Debt Ceiling Meeting Yields Little Progress, Though Biden and GOP Agree to Spending Talks” GovExec.com, 9 May. 2023, https://www.govexec.com/management/2023/05/debt-ceiling-meeting-yields-little-progress-though-biden-and-gop-agree-spending-talks/386159/
7. “Debt ceiling: What happens if US government defaults?” Vox.com, 6 May. 2023, https://www.vox.com/policy/2023/5/6/23707949/debt-ceiling-crisis-budget-deal-questions
