In a high-stakes meeting about the debt limit on Wednesday, President Joe Biden is expected to press House Speaker Kevin McCarthy on two key matters: Outlining what spending cuts he and his GOP conference are looking for in exchange for increasing the country’s borrowing power, and getting his commitment to avoid a first-ever default on the nation’s debt.
The White House outlined the two key questions in a memo released Tuesday by Office of Management and Budget Director Shalanda Young and National Economic Council Brian Deese. The memo is the latest in the standoff between the White House and House Republicans over the country’s borrowing limit after the U.S. reached the $31.4 trillion debt ceiling earlier this month.
The Treasury Department has begun using “extraordinary measures” to fund operations and allow the country to continue paying its debts, which are expected to run out in June.
Republicans want to tie a debt ceiling increase to spending cuts, saying that they would only raise the limit to secure an overhaul in federal spending. They have not yet specified what cuts they’re looking for.
“The only thing I’m really going to gauge is do you want to negotiate or do you want to play politics,” McCarthy told Punchbowl News in an interview ahead of the meeting. “I’m not going to play these games, so you tell me when you want to negotiate. If you think you can beat me up, I’m going to be reasonable.”
“The sooner we sit down, the sooner this doesn’t become a problem,” he said, adding: “We’re eventually going to have to dance together, so when do you want to play the music, now or later?”
Democrats, on the other hand, want a clean debt ceiling increase, arguing that Congress has voted to raise the borrowing limit numerous times under presidents of both parties, including three times under Biden’s predecessor, Donald Trump. Lawmaers on the left are pushing McCarthy to present his plan for spending cuts.
“For days, Speaker McCarthy has heralded this sitdown as some kind of major win in his debt ceiling talks,” Senate Majority Chuck Schumer, D-N.Y., said on Wednesday. “Speaker McCarthy, if you don’t have a plan, you can’t seriously pretend you’re having serious any real negotiations.”
“We know why the Speaker has struggled and is unable to produce a plan, is delaying it or avoiding it,” Schumer added. “He doesn’t have the votes for one, in all likelihood.”
White House officials have warned that not raising the debt ceiling would have a devastating impact on the global economy.
“As the President has said many times, the United States must never default on its financial obligations,” the memo from Deese and Young reads. “Raising the debt ceiling is not a negotiation; it is an obligation of this country and its leaders to avoid economic chaos.”
“In Wednesday’s meeting, President Biden will seek a clear commitment from Speaker McCarthy that default … is unacceptable,” they continued. “President Biden will ask Speaker McCarthy to publicly assure the American people and the rest of the world that the United States will, as always, honor all of its financial obligations.”
Or, as Biden put it on Monday, when asked for his message to McCarthy: “Show me your budget, I’ll show you mine.”
The Democratic president and the California Republican have traded barbs at one another throughout the process, with both sides blaming the other for the impasse.
McCarthy responded to the White House’s memo in a Twitter post on Tuesday, writing: “I’m not interested in political games. I’m coming to negotiate for the American people.”
At a political event on Tuesday, Biden called McCarthy a “decent man” who has bowed to the pressure from far-right members of his conference, making “commitments that are just absolutely off the wall for a speaker of the House to make” in exchange for the speaker’s gavel.
McCarthy, for his part, called Biden’s negotiating position “childish.”
“Why would you put the economics of America in jeopardy?” the California Republican said to reporters. “Why would you play political games? I’m not.”
With other prominent Republicans, including Senate Minority Leader Mitch McConnell, R-Ky., backing McCarthy to lead the party’s negotiations on raising the debt ceiling, Wednesday’s meeting could prove crucial to reaching an agreement. The Kentucky Republican made it clear last week that any deal would have to be negotiated between the president and the speaker.
“We are all behind Kevin,” Leader McConnell said Tuesday ahead of the meeting between Biden and McCarthy.
In an interview with CBS News on Sunday, McCarthy did not specify what cuts his conference is seeking, but rather sought to slam Democrats and the president for reckless spending.
“I want to find a reasonable and a responsible way that we can lift the debt ceiling, but take control of this runaway spending,” the California Republican told CBS’ “Face the Nation” on Sunday, adding: “I don’t think there’s anyone in America who doesn’t agree that there’s some wasteful Washington spending that we can eliminate.”
The White House fired back, writing in Tuesday’s memo that “any serious conversation about economic and fiscal policy needs to start with a clear understanding of the participants’ goals and proposals.”
“Speaker McCarthy and his Caucus need to transparently lay out to the American people their fiscal and economic proposals in the normal budget process,” Young and Deese wrote, adding: “On Wednesday, President Biden will seek clarity from Speaker McCarthy about when the public can expect to see his detailed, comprehensive budget.”
The memo from the two economic advisers also presented data on how much House Republicans’ proposals – including repealing portions of the Inflation Reduction Act, extending the Trump-era 2017 tax cuts and the imposition of a 30% national sales tax – would increase the national deficit.
They also noted that Biden will release his budget on March 9, which will aim to demonstrate how the president “plans to invest in America, continue to lower costs for families, protect and strengthen Social Security and Medicare, and reduce the deficit – with tables and numbers showing exactly how his economic and fiscal policies add up to achieve these goals.”
A recent poll suggests that taking a hard-line stance against President Biden appeals to a majority McCarthy’s party. A Pew Research survey released Tuesday shows that 64% of Republicans and Republican-leaning independents want the party’s leaders to stand up to Biden and Congressional Democrats, even if it makes it more difficult to address the country’s problems, compared to 34% who want the party to work with the White House, even if it results in disappointment for some GOP voters.
Conversely, the survey found that 58% of Democrats and Democratic-leaning independents want President Biden to work with the GOP and find compromise, compared to 41% who want him to stand up to them on issues important to left-leaning voters.
