McCarthy says he and Biden can find common ground on debt limit

President Kevin McCarthy said he believes he can reach an agreement with President Joe Biden on raising the nation’s debt ceiling, but declined to outline the cuts he wants to federal spending and gave no details about what he the two men spoke in their Oval Office. meeting on Wednesday.

“I just came out to have an hour-long conversation with this president that I tell you, in hindsight, it was a good conversation. No agreements. There are no promises except that we will continue this conversation,” he told reporters outside the White House after the meeting ended.

“There is nothing in there with me walking away that I don’t believe that at the end of the day we can reach an agreement that makes America stronger, puts us on the path to balance and exactly what the American people are asking us to do. It is our responsibility,’ he added.

The two men met for the first time since McCarthy won the speaker’s seat and their meeting came amid an impasse over raising the country’s $31.4 trillion debt limit.

The White House, in a readout of the meeting, said it was “a frank and direct dialogue.”

Before the meeting, both sides laid out their arguments: Biden wanted specific details from McCarthy about what federal spending he wants to cut, and McCarthy wants Biden to agree to negotiate with him on future federal budgets.

The meeting ended as it began: in a stalemate.

Both the White House and the speaker said the talks will continue. The county is expected to reach its borrowing limit in June. Wednesday’s meeting was expected to be the opening session for many negotiations to come.

‘The president and I are trying to find a way to work together. We will continue to do that,’ McCarthy said.

Republicans are pushing for negotiations so they can propose cuts to the federal budget. Biden has made it clear that he wants the debt limit raised with no strings attached. The White House notes that Republicans agreed to that three times under President Donald Trump.

The administration doubled down on that stance after the meeting, saying a discussion on debating is a “separate” one.

“The president welcomes a separate discussion with congressional leaders on how to reduce the deficit and control the national debt while continuing to grow the economy,” the White House said.

Before the meeting happened, the White House said that President Biden would ask McCarthy to agree that the nation should not default on its debt.

The speaker declined to say if he made that promise.

‘Now is a moment in time. We have five more months,’ she said.

He also declined to say what he specifically wants to cut in federal spending, saying he won’t negotiate in the press.

But he added: ‘There are a lot of savings to be found for the American taxpayer. This is a hardworking taxpayer. There are plenty of places where Washington spending is wasted. I think we can come to an agreement.

He called the debt the “biggest threat” to the United States.

The United States has never defaulted, and economists fear that a default could trigger a global recession and damage America’s credit rating.

Republicans have floated several ideas on how to make the cuts they want in federal spending, including bringing federal spending back to its pre-COVID levels.

The House Republican Party met on Capitol Hill Wednesday morning to brainstorm ways to cut federal spending. The Republican leadership was looking for general thoughts and ideas about what should be removed from their members.

They indicated that cuts to Social Security and Medicare would be off the table. Drastically cutting the budget for any of the programs could be a political liability for Republicans with voters.

“This is much more to educate a lot of our colleagues about the different components of the debt ceiling,” Rep. Byron Donalds said of their meeting.

Democrats, in turn, argue that there is nothing McCarthy can propose that will give him the 218 votes he needs among his Republicans to move through the legislative process.

McCarthy can only afford to lose four Republican votes if he wants to pass a debt ceiling increase without the help of Democrats.

Senate Republicans are letting McCarthy take the lead while they stand down to see what happens.

Senate GOP leader Mitch McConnell has made it clear that he is taking a hands-off approach.

“I think the deal obviously has to be made between the majority of the House and the Democratic president to have a chance of surviving here,” he said.

Trump raised the debt limit three times during his presidency without drama or stalled negotiations. During his four years in office, the debt rose from $20 billion to nearly $28 billion.

But the debt rose further due to a series of post-pandemic spending programs Democrats enacted to help the country recover financially from its COVID shutdown.

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.

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

The United States has never defaulted on its debt, but it has come close.

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.