McCarthy will meet with Biden to discuss debt limit on May 9 after default warning

House Speaker Kevin McCarthy has accepted an invitation from President Joe Biden to discuss the debt limit on May 9 in a bid to end the ongoing deadlock, according to a report citing a source familiar with the matter.

The invitation came after the Treasury Department warned that American would run out of money by June 1 and be unable to pay off its debts sooner than expected, putting lawmakers on edge to avert an economic crisis.

Biden called McCarthy as well as minority leaders in the Senate and House Monday afternoon, Republican Senate Majority Leader Mitch McConnell, Democratic House Leader Hakeem Jeffries and Senate Majority Leader Chuck Schumer.

Now, according to a source quoted by CNN, McCarthy has accepted Biden’s invitation. If the May 9 meeting goes ahead, it will be the first time Biden and McCarthy have met since February for talks about the impending crisis.

The warning came from Secretary of the Treasury Janet Yellen, who told the divided House in a letter to Congress that time was running out. to raise the $31.4 trillion federal government debt ceiling.

“In my January 13 letter, I noted that cash and extraordinary measures were unlikely to be exhausted before early June. After looking at recent federal tax revenues, our best guess is that we won’t be able to meet all government obligations by early June, and possibly as early as June 1,” Yellen wrote.

Just after Yellen’s letter was made public, it was revealed that Biden called McCarthy’s team to set up a meeting on how to proceed with the country’s borrowing cap.

Biden and McCarthy have disagreed on how to proceed.

At the May 9 meeting, it is clear that Biden intends to emphasize that Congress must take action to avoid default without conditions,” a White House official said.

But the Republicans insist they will not allow the debt ceiling to be raised without spending cuts, and the Democrats insist they will only agree to a clean increase.

Any agreement on how to proceed must first be worked out between the speaker and the president.

The GOP-led House and Democrat-led Senate should get on board and pass it on and send it to the president’s office, all within a month.

The house has four days a week in the week of May 15 and 22, with Friday being free. Dan leaves the House of Washington the week of May 29 and returns on June 5. The Senate will be absent from May 22-29 for a state work period.

“There is very little time in the legislative calendar for a deal to be reached,” analyst Alec Phillips of Goldman Sachs Group Inc wrote in a note to clients. “The coming weeks will be unpredictable.”

While there is enough precedent to change Congress’s scheduled state work visits, Biden’s May travel schedule is less flexible.

The meeting of the leaders of the Group of Seven in Hiroshima, which the White House says Biden will attend, will begin on May 19, and he will have to leave earlier to get there on time. Then he will attend the Quad Leaders’ Summit meeting in Sydney, Australia, on May 24, the White House said.

While much is negotiated in Washington over Zoom, text, or over the phone, sensitive political compromises are still typically the terrain of deal-making in the room.

Schumer’s office revealed Monday that the majority leader had scheduled votes on a clean two-year suspension of the federal debt ceiling — past the 2024 election — and the House-passed GOP debt limit bill, which could be largely amended in a deal.

Schumer and Jeffries also released a joint statement stressing the need for a clear increase in the borrowing limit.

“We don’t have the luxury of waiting until June 1 to get together, take a clean bill to avoid a default and avoid catastrophic consequences,” they said.

Last week, the House passed sweeping debt-ceiling legislation that Senate Democrats insisted is dead upon arrival in their chambers.

Republicans have said their plan would save $4.5 trillion in exchange for a $1.5 trillion increase in the country’s credit limit. Now the GOP leadership insists the ball is in Biden’s court to come to the negotiating table.

Now, some House Democrats have even said publicly that it’s time for Biden to come to the negotiating table.

But after the political wrangling it took for McCarthy to get his conference on board with a party-line bill, the question looms as to how he would get his party organization on board with a less conservative bill.

Asked how he could then get his caucus to agree to a debt ceiling bill that could actually be passed by the Democrat-led Senate last week, the speaker objected.

“With the president still not negotiating, I’m confident that one party put the debt ceiling in place. We raised the debt ceiling so no one has to worry about whether the debt ceiling will be lifted,” he said.

‘We did. The Democrats don’t. The president wants to ensure that the debt ceiling is lifted, sign this bill.”

“Other bills we’ve passed say you’re going to veto, at the end of the day you’re probably going to sign this one too,” McCarthy said in words directed to Biden.

Last week, Biden said he would only meet McCarthy if he didn’t use the debt limit as leverage.

“Happy to meet McCarthy,” Biden said. “But not about whether or not to extend the debt limit. That is not negotiable.’

The new June 1 date is a shorter timeline than forecasters predicted.

The Congressional Budget Office (CBO) released its own assessment confirming that the country would run out of money to pay all of its bills in early June, after previously stating that the deadline would fall between July and September.

“The extent to which the Treasury will be able to fund the government’s ongoing operations using cash balances and remaining extraordinary measures will also remain uncertain in May, even if the Treasury turns out to be out of money by early June,” he said. CBO director Phil. Swagel wrote in a Monday statement.

If Congress doesn’t act, some legal experts say Democratic President Joe Biden has another option to avert a crisis: to invoke the 14th Amendment to the US Constitution to make sure the United States pays its bills. can continue to pay.

Part Four of the 14th Amendment, passed after the Civil War of 1861-1865, states that the “validity of the national debt of the United States … shall not be called into question.”

Historians say this was to ensure that the federal government would not forsake its debts, as some former Confederate states had done.

But the clause has largely gone unheeded by the courts, and legal experts disagree on what it requires of Congress and the presidency.

Some, like Cornell University law professor Michael Dorf, say the “least unconstitutional” option would be for Biden to act alone to protect the integrity of the national debt. That would mean borrowing money,” he said.

Any action by Biden would surely lead to a lawsuit.