President Joe Biden and House Republican Leader Kevin McCarthy were expected to speak on Sunday, two days after fears of a default by the world's largest power became palpable following the explosion of talks on raising the national debt ceiling.
Biden attacks Republicans over debt ceiling crisis // Reuters | Reuters
Biden said Sunday that he plans to speak with McCarthy from the presidential plane on his way back to Washington from the G7 summit in Japan, which he attended over the weekend. "We'll have a chance to talk during the day," the president told reporters.
Biden had originally planned to make a historic visit to Papua New Guinea and then continue to Australia, but the continued debt-ceiling crisis led to the cancellation of those plans.
"It's time for Republicans to internalize that there's no scenario where we reach a compromise based on only one side of the political divide," Biden said at the news conference. He said he agreed to go Republican when he announced he would agree to cut government spending. "Now it's time for the other side to move beyond its extreme position," he said.
On Friday, Republicans left the talks in anger, saying the Biden administration was unwilling to accept their demand for a significant limit on federal funding for health and welfare programs. The Biden administration, which does not want to hurt the Democratic base ahead of the 2024 election, is demanding smaller cuts as well as tax increases to boost the public coffers. But despite the explosion, Biden said the explosion was temporary and was due to his absence from Washington.
"I hope the chairman just wants to wait and talk to me directly. I'm waiting to see if that's true," Biden said Sunday. Either way, on Saturday, McCarthy tweeted that the blame for the explosion lay with an administration that "took a step backward" and even accused: "Biden is willing to be the first president in history to default just so as not to annoy the radical socialists who currently dominate the Democratic Party."
A day later, Biden responded with the same coin, saying that the Republican Party is dominated by populist extremists loyal to former President Donald Trump, who is expected to be the Republican nominee in the 2024 presidential election. "I think some of them in the House are well aware of the terrible damage that would be done to the economy if that happened [insolvency], but because I'm president and everything is in my name, they think the blame will fall on me and that's the way to make sure I don't get reelected."
The US administration has been warning for several weeks that if Congress – one of whose houses is controlled by the Republican Party – does not raise the debt ceiling, the US government will have no way to finance its obligations regarding the regular payments to repay loans it has taken. This could mean a default that would shake up the economy and probably lead to a downgrade in the U.S. credit rating, with all that entails. The reason the US needs to take out more and more loans – in the form of bonds and other means – is that it has a fixed budget deficit, meaning that it has too little money available than it needs to spend on current payments, and if the debt ceiling is not changed, the government will probably have no way to finance the current deficit by the beginning of June. In fact, a few months ago, the US officially reached the debt ceiling, but the US Treasury Department managed to finance the deficit with existing funds and not through new loans by diverting resources. Now, these special measures will probably not be enough, and the United States may, for the first time in history, be in a state of payment arrears.
It is believed that McCarthy will eventually succeed in passing legislation in the House thanks to help from Democrats, but the drama will continue until the last minute, as it was more than a decade ago, when another Democratic president – Barack Obama – sat in the White House and the House was also Republican.
Wrong? We'll fix it! If you find a mistake in the article, please share with us