Where Biden and the Republicans stand on the debt limit ahead of ‘Big Four’ meeting

President Biden will sit down with congressional leaders on Tuesday and take on debt ceiling speaker Kevin McCarthy in their first talks on the issue in more than three months.

The meeting of the two leaders, along with Minority Leader Hakeem Jeffries and Senate Majority Leaders Chuck Schumer and Mitch McConnell, will take place at 4 p.m. after markets close.

Both sides are as always entrenched in their opposing demands over the country’s borrowing limit – even though the finance ministry says it could be as little as three weeks before the country runs out of money to pay its bills.

McCarthy, with the weight of House and Senate Republicans behind him, insists there will be no clean debt ceiling bill to pass Congress. However, Democrats are just as adamant that there should be a “clean” increase in the country’s borrowing limit, without any cuts.

If the federal government can’t borrow more money and the country’s bills pile up rent than tax receipts, the U.S. could plunge into a catastrophic default, potentially triggering a recession and rising unemployment. The Ministry of Finance has said this could happen as early as June 1.

Here’s what both sides are demanding ahead of Tuesday afternoon’s crucial meeting at the White House:

The White House is holding its cards close to its chest, still demanding an unrealistic, clean debt ceiling hike as previous administrations have secured from Congress

Biden insists he will not negotiate raising the country’s $31.4 trillion borrowing limit.

While holding his own, the White House has publicly attacked Republicans with various accusations about the impact their proposed debt plans will have on Americans’ lives.

In a memo Monday, Deputy White House Press Secretary Andrew Bates said the GOP plan would exacerbate the fentanyl crisis at the border.

He also said talks about austerity should be a separate conversation to be had after the debt ceiling is raised. The separate credit talk on cuts would have a later deadline of September.

“The two are totally unrelated,” Biden said Friday. “They are two separate issues, two. Let’s sort it out.’

Describing the upcoming meeting, White House Press Secretary Karine Jean-Pierre said, “I wouldn’t call it debt ceiling negotiations. I would call it a conversation between the four leaders and the president.”

‘They have to do their job. They need to get a clean debt ceiling,” she said of Congress, noting that the debt ceiling has been raised 78 times since 1960.

Biden has long insisted that he would not talk to McCarthy until the Republicans released a written budget.

After the House passed a party-line debt ceiling late last month and the Treasury revealed that the country could run out of money sooner than expected — on June 1 — the president convened congressional leaders of the “Big Four” for a meeting.

Republicans are demanding the White House can accept budget cuts

After heavy political wrangling, the House GOP leadership passed the Limit Save Grow Act — legislation that raises the debt limit by $1.5 trillion in exchange for $4.5 trillion in spending cuts over time.

The package passed on a party line on April 26 and is dead on arrival in the Senate, but Republicans are demanding Democrats spell out what they don’t like in the bill to see where both parties can meet in the middle.

“If there’s something you disagree with, if you have ideas of your own, our speaker is more than happy to listen to them,” House Majority Whip Tom Emmer said last week.

Their proposal spans a wide range of priorities — it would withdraw unused Covid-19 funds and undo some Biden priorities — ban student loan forgiveness and scrap some green tax credits, set stricter employment requirements for social programs. Republicans also want to include their sprawling energy package, the House-approved HR 1, and the rule-cutting REINS bill.

After the generally receptive Republicans from farmland districts threatened to vote against provisions of the bill that eliminated ethanol subsidies, those tax cuts were reinstated.

Work requirements for benefits like SNAP and TANF also tightened after conservative hardliners wanted them to start earlier – now they start in 2024 instead of 2025.

Senate Republicans have vowed to support McCarthy’s position that the borrowing ceiling will not be lifted if there are no cuts.

A group of 43 GOP senators, led by Senator Mike Lee of Utah, threatened last weekend to block a debt ceiling deal that was not tied to “substantial” spending cuts.

The group is large enough to filibuster a clean debt ceiling bill in the Senate — meaning such legislation would fail in both chambers of Congress.

Democrats insist a clean, long-term increase in the debt limit is the only way to go

If Treasury Sec. Janet Yellen said on Monday that if no deal is reached, Biden will have a “variety of different options, but there are no good options.”

“Any option is a bad option, and I really don’t want to discuss and rank them,” she said on CNBC.

White House officials are reportedly looking to invoke the 14th Amendment.

A seldom used provision in the amendment reads: “The validity of the national debt of the United States authorized by law, including debts incurred for the payment of pensions and contributions for services in the suppression of insurrection or rebellion, shall not be cast into doubt.’

But that option is politically and economically risky, according to advisers.

Schumer tempered that notion last Tuesday. “The right way is a clean debt ceiling,” he said.

On Monday, the National Association of Government Employees filed a lawsuit to get Yellen and Biden to stop meeting the debt limit. They argued that the debt ceiling is prima facie unconstitutional because it forces the president not to implement spending already approved by Congress.

“This process is both an effort to protect our members from illegal furlough and to correct an unconstitutional statute that often causes uncertainty and fear for millions of Americans,” NAGE National President David J. Holway said in a statement.

Another idea being toyed with is a short-term extension of the debt limit. Some Senate Republicans have brushed off the idea of ​​raising the debt limit by 30 days to give both sides more time for budget talks, but the majority of the GOP conference said it was too early to talk about a short-term extension.

“Well, I don’t think it’s responsible to kick the can on the road,” House minority leader Hakeem Jeffries told NBC Sunday, echoing similar comments Schumer made last week.