President Joe Biden held a virtual meeting on the debt crisis Friday morning as fears of a US bankruptcy loom over the G7 summit and the clock ticks towards America being unable to pay its bills.
Biden’s call came after Vice President Kamala Harris attempted to participate in negotiations on Thursday but struggled with voice issues during a Zoom call with leaders.
The president, surrounded by White House Deputy Chief of Staff Bruce Reed, Press Secretary Karine Jean-Pierre and White House Deputy Chief of Staff Jen O’Malley Dillon, held a 20 to 30 minute zoom call with his Washington negotiating team, where it was late Thursday night.
Biden asked for the update, the White House said, and was told “steady progress” is being made. Harris was not pictured during the conversation in a photo tweeted by the White House.
President Joe Biden hosted a virtual meeting of debt limit negotiations while attending the G7 summit in Japan
“The president directed his team to continue to work toward a bipartisan agreement and made it clear that vital programs for hard-working Americans and the economic progress of the past two years must be protected as negotiations are well advanced. He remains confident that Congress will take the necessary steps to avoid default,” a White House official said.
Reed, one of Biden’s top domestic policy advisers, is traveling with the president specifically to update him on the debt talks.
Biden shortens his trip — skipping scheduled stops in Australia and Papua New Guinea — to return to the negotiating table in Washington after his meeting with G7 leaders.
But he will have to spend some of his time in Hiroshima reassuring leaders that the United States is a reliable partner, even as Washington questioned its ability to pay its debts.
Harris tried to help on Thursday. The White House has emphasized that the vice president is a big part of the negotiations, but she was absent from Biden’s first meeting with congressional leaders on the subject.
And during a Zoom call hosted by the White House Office of Public Engagement on Thursday, she could barely get her opening line out.
“You can tell I have a bit of a frog in my throat, please forgive me,” she said, her voice cracking.
“I’ve been talking a lot about this issue lately,” she said with a chuckle.
Harris only managed to get a few lines out of her pitch about the ‘unprecedented’ nature of a default.
“It’s never happened before,” she said. “It would mean that if it happened, it would be the first time in history that the United States government didn’t pay its bills.”
Just as she was getting started with the Donald Trump tax cuts, even as she was still struggling with voice issues, her audio cut out.
Vice President Kamala Harris entered negotiations on Thursday — but struggled at times to get through her remarks with a ‘frog’ stuck in her throat
Top Biden aides and House Speaker Kevin McCarthy continue to hold talks as the Treasury Department says the US will default on June 1.
McCarthy told reporters at the Capitol on Thursday that it was important to have an “agreement in principle” by the weekend if they hope to reach a vote in the House next week.
That would leave enough time for the Senate to act before June 1 as well.
“Everyone works hard.” said McCarthy.
The White House negotiating team was at the Capitol on Thursday and is expected to return Friday as both sides try to reach a deal that Democrats and Republicans can live with.
Steve Ricchetti, adviser to the president, along with Office of Management and Budget Director Shalanda Young and Legislative Affairs Louisa Terrell represent the administration in the talks.
McCarthy has directed Republican Representatives Garret Graves of Louisiana and Patrick McHenry of North Carolina to lead the GOP.
“I am confident that we will get the budget deal and that America will not default,” Biden said before leaving for Japan on Wednesday.
Republicans wanted massive cuts in federal spending before agreeing to a debt deal, which Biden called an unstarted one. The president wants a clean increase in the debt ceiling.
One area where both sides seem likely to agree is the Republican proposal to recover about $30 billion in unspent COVID-19 funds now that the federal government has officially ended the pandemic emergency.
McCarthy’s Republicans want to cut spending to fiscal year 2022 levels and limit annual increases to just 1% over the next decade — sparing defense and veterans bills — in what Democrats say would be devastating cuts that would hurt many Americans in would bring difficulties.
Republicans know their proposal will only dent the country’s growing debt burden, but they argue that austerity has to start somewhere to get to grips with what they say are unsustainable annual deficits.
Democrats are resisting and negotiators are looking at budget caps for years to come as an alternative to limits that would stretch for a decade.
Notably absent from the negotiating space are the congressional proprietors—the House and Senate Speakers who head the Appropriations Committees, who actually crafted the spending plans. Clearly, Democratic proprietors and perhaps even some Republicans would almost certainly be hesitant about the levels of cuts being considered.
Showing the pressure McCarthy is facing from his right flank, the conservative House Freedom Caucus said in a statement “there should be no further discussion” until the Senate passes the Republican bill passed by the House.
With the Senate under Democratic control, that is highly unlikely. And Biden already said he would veto it.
House Democratic leader Hakeem Jeffries said Thursday that the Republican proposal for stricter job requirements for state aid recipients is a “nonstarter.” Period of time. Point.’
President Joe Biden will have to spend some of his time at the G7 reassuring leaders that the US is a reliable partner
Jeffries noted that many House Republicans themselves, including McCarthy, voted against improved work requirements for food stamp recipients in the Supplemental Nutrition Assistance Program a few years ago.
“This is a hostage situation,” Jeffries said. “They are trying to extract ransom notes to avoid default.”
But Biden opened the door to some additional demands for non-healthcare programs like Medicaidand the discussions about food stamps and money aid programs are ongoing.
In terms of permit changes, Republicans are eager to overturn the National Environmental Policy Act, called NEPA, so that energy projects can be approved and developed faster, without years of delays from challenges and lawsuits.
Biden’s own climate adviser John Podesta met with some House Democrats this week as the administration, too, seeks changes that would accelerate clean energy projects and upgrade transmission lines to fight climate change.
But the two parties remain far apart on the size and scope of reforms permitted, with several prominent lawmakers, including Democratic Senator Joe Manchin of West Virginia, having their own proposals.
It’s unclear whether the negotiators will be able to reach a final agreement on the licensing terms or simply reach a framework that could lead to future discussions between the White House and Congress.
There is little time before the June 1 deadline to raise the debt limit and avoid what economists are warning of a devastating default, the first of its kind, to plague the economy.
McCarthy has vowed to abide by house rules that require 72 hours’ notice before a bill can be voted on, meaning a deal is needed this weekend if the House wants to vote before it leaves for Memorial Day recess late next week .
Speaker Kevin McCarthy told reporters at the Capitol on Thursday it was important to have an “agreement in principle” by the weekend if they hope to get to a vote in the House next week
Senate Majority Leader Chuck Schumer told senators on Thursday, as they prepared to leave for their own week-long recess, to be ready to return with 24 hours’ notice to vote, if necessary. More likely, the Senate is expected to begin voting when it returns after Memorial Day.
Democrats in the House and Senate are pursuing other strategies, including forcing a vote to raise the debt limit without the cuts that Republicans are demanding. Progressives are also pushing Biden to call the 14th amendment to raise the debt ceiling, something the president has indicated he is not yet inclined to do.