Biden and Schumer take debt limit fight to Kevin McCarthy

White House and Senate Democratic Leader Chuck Schumer attacked House Speaker Kevin McCarthy ahead of this week’s negotiations to raise the debt ceiling as talks remain deadlocked and the clock moves towards non-compliance.

“The president will ask Chairman McCarthy if he intends to fulfill his constitutional obligation to avoid a national default, as every other House and Senate leader in United States history has done,” a spokesman said. from the White House in a statement.

McCarthy will meet with President Joe Biden at the White House on Wednesday to discuss raising the country’s debt limit to $31.4 trillion, which is expected to be reached sometime in June.

Raising the nation’s debt limit marks the first major showdown between Democrats and Republicans since the GOP took control of the House.

Schumer, who heads the Senate, took a combative tone when speaking of McCarthy, who heads the House, accusing the Speaker of the House of allowing “extremist” Republicans to have undue influence on matters of policy.

‘Unfortunately, [McCarthy] left a very extreme group of people, gave them the tools’ to wield power, Schumer said in an interview with political. “The plan is to get our fellow Republicans in the House to understand that they are flirting with disaster and hurting the American people. And let the American people understand it too. And I think we will win.

McCarthy was elected speaker in a historic post-midnight vote on the 15th early on the 7th of January, but made side deals with the Conservatives to win their support.

Schumer, for his part, will have to get a debt ceiling through the Senate, but he has gotten enough Republicans on board in the past to make it happen. Senate GOP leader Mitch McConnell has said he will sit out the debt talks and let McCarthy take the lead.

Both Biden and Schumer oppose the Republican suggestion to cut unspecified federal spending in exchange for raising the country’s debt limit.

The US debt is now about equal to the country’s gross domestic product, a measure of annual economic output. It is on track to be 225% of GDP by 2050, according to the Penn Wharton budget model.

McCarthy has said that government spending needs to be cut, but he hasn’t said what or how much.

“I want to find a reasonable and responsible way that we can raise the debt ceiling but take control of this rampant spending,” McCarthy said Sunday on CBS’s Face the Nation.

To stabilize debt near current levels, the government would have to permanently cut all spending by 30%, increase tax revenue by 40%, or some combination of both, Kent Smetters, a professor at the University of Pennsylvania and director of the Penn Wharton budget. Model, via Associated Press.

McCarthy hasn’t given details about what he wants cut, but said cuts to Social Security and Medicare were “off the table.”

He also did not rule out cuts in defense spending, which some Republicans have resisted, but Pentagon funding makes up a large part of the federal budget.

And it’s unclear whether the Speaker has enough votes among Republicans to raise the debt ceiling without help from Democrats. He can only afford to lose four Republican votes.

“The president will ask what the president’s plan is,” the White House said.

McCarthy, for his part, has said he wants both sides to work together to cut public spending, though Biden has said that option is off the table for him.

“I don’t think there’s anyone in America who doesn’t agree that there are some wasteful spending in Washington that we can eliminate,” the California Republican said on Face the Nation. “I want to sit down together, come to an agreement where we can move forward to put ourselves on a path toward balance, while not jeopardizing any of our debt.”

McCarthy argues that the huge debt is already hurting the economy.

Biden counters that any cut in federal spending would hurt the lower and middle classes.

What in God’s name would Americans give up the progress we’ve made for the chaos you’re suggesting? Biden said of the Republicans Thursday during an economic speech in Virginia.

‘In the United States of America, we pay our debts,’ he said. “It took 200 years to accumulate that debt.”

The White House notes that Republicans in the past, including during the presidency of Donald Trump, have voted to raise the debt limit with no strings attached, known as a “clean” increase in the debt limit.

Biden met with Schumer and House Minority Leader Hakeem Jeffries at the White House last week. Democrats then began pushing a message of unity to raise the nation’s debt limit.

“We have a responsibility to pay the debts that Congress has already incurred,” Jeffries said.

Treasury Secretary Janet Yellen warned earlier this month that the country would hit its debt ceiling on January 19.

But he also said he can keep the money flowing until June, a move known as “extraordinary measures.”

Additionally, Yellen wants lawmakers to raise the cap beyond the November 2024 presidential election to eliminate it as a campaign issue.

In the event of a default, “we will have a financial crisis,” he told Axios. “And I think we would have a recession in the United States.”

The United States has never defaulted on its debt and there are concerns that doing so will trigger a global financial crisis.

The country has come closer.

In 2011, majority House Republicans demanded then-President Barack Obama trade deficit reductions in exchange for an increase in the debt ceiling.

The back-and-forth debate went all the way, with the debt ceiling being raised just two days before the US defaulted.

The brinkmanship alone led to a major economic crisis for the country, resulting in one of the worst weeks for markets since the 2008 financial crisis, plunging stock prices and hurting people’s retirement savings.

Mortgage rates have skyrocketed, hurting potential homebuyers.

The standoff also resulted in the US downgrading its credit rating and taking months for the economy to recover.