The Democratic president is calling on lawmakers to raise the federal government's self-imposed borrowing limit without conditions. Republican House of Representatives Speaker Kevin McCarthy has said his chamber will not approve any deal that does not cut spending to address a growing budget deficit. Past debt ceiling fights have typically ended with a hastily arranged agreement in the final hours of negotiations, thus avoiding a default. In 2011, the scramble prompted a downgrade of the country's top-notch credit rating; veterans of that battle warn the current situation is even riskier because political divides have widened.
Tuesday's meeting was likely to be the start of an increasingly fraught period, with no certainty on the final outcome. White House press secretary Karine Jean-Pierre told reporters on Monday that Biden plans to say at the meeting: "It's Congress' constitutional duty to act, to prevent default. The president is going to be very clear about that." McCarthy, whose party holds the House by only a slim majority, wants to tie a vote on the debt ceiling to broad spending cuts that the White House considers draconian. "Pull back on some of the spending that you seem hell-bent to do and then we can negotiate," Republican Senator Bill Cassidy of Lousiana told CNN on Monday.
Biden would agree to a separate discussion on the budget but
not tied to the debt ceiling, the White House said.
Biden's meeting with McCarthy will be their first since Feb.
1. They will be joined by Senate Majority Leader Chuck Schumer
and top Senate Republican Mitch McConnell. Top House Democrat
Hakeem Jeffries will also join the talks.
The start of active talks could soothe the nerves of
investors who last week forced the federal government to pay its
highest interest ever for a one-month debt issue.
Biden's foreign travel plans and House and Senate recesses
mean there are just seven days when all three parties are
scheduled to be in town before June 1.
Treasury Secretary Janet Yellen said on Monday a failure to
raise the debt limit would cause a huge hit to the U.S. economy
and weaken the dollar as the world's reserve currency.
Few countries in the world have debt ceiling laws and
Washington's periodic lifting of the borrowing limit merely
allows it to pay for spending Congress has already authorized.
White House officials have discussed whether Biden has the
authority to lift the debt limit on his own by invoking the U.S.
Constitution's 14th amendment, but Biden told MSNBC last week
that "I've not gotten there yet" on this argument.
The 14th amendment says the validity of the public debt of
the United States "shall not be questioned." Invoking it would
trigger a legal challenge.
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(Reporting By Steve Holland; Editing by Heather Timmons and
Lincoln Feast)
