American President, Joe Biden met This Tuesday with the leader of the Republican majority in the House of Representatives, Kevin McCarthy to discuss need for debt ceiling suspension and thus prevent the United States from suspending payments, without reaching an agreement.
Biden and McCarthy have only reiterated their position on the suspension of the debt ceiling, which hit the $31.4 trillion mark on Jan. 19, so the Government is now resorting to money in its reserves to pay off debts. you contracted the Treasury Department estimates these reserves will be depleted on 1 JuneOn this date, the United States would automatically suspend payments for the first time in its history.
The meeting took place in the Oval Office of the White House. It was the first time Biden and McCarthy had met to discuss the issue since their last meeting at the White House on February 1. Also present at the meeting were Senate Majority Leader Chuck Schumer, Mitch McConnell, Senate Minority Leader and House Minority Leader Hakeem Jeffries.
At the end of the meeting, McCarthy assured dozens of reporters gathered outside the Oval Office that there were no “new moves” in talks with Biden. McCarthy wants linking the suspension of the debt ceiling to massive spending cuts It wants to toughen up some of its stellar programs, such as canceling Biden’s student debt, as well as the requirements that the poorest Americans must meet to access healthcare and food aid.
Biden has been saying for weeks that he is not willing to negotiate the debt ceiling and is in the hands of the Republicans. Obligation to ensure that the United States can pay its debts already contracted, as they have done several times with his predecessor Donald Trump (2017-2021). At the end of the meeting, Biden reiterated his stance and tried to comfort the markets by saying, “The US will not pay its debts, never will and will never.” He added that he will meet again with McCarthy and the rest of the congressional leadership on Friday and that his teams will continue negotiations until then.
The two sides reiterated their positions, as well as spoke publicly about the possibility of finding a solution in the short term. Asked by the press before meeting with Biden, McCarthy said he was not willing to push for a bill that would suspend the debt ceiling until September to give more time to negotiations with Democrats. “He[Biden]should stop ignoring these issues. Why are you wasting time? Let’s solve this now,” said McCarthy, who sees it necessary to reach a deal next week to prevent the US from defaulting.
According to White House spokeswoman Karine Jean-Pierre, a “short-term extension” is also not part of the Administration’s plans, but did not rule it out entirely. As a matter of fact, Biden emphasized after the meeting that he did not exclude a short-term solution to the debt ceiling. “I’m not ignoring anything. We’ll see you again. The only thing I really rule out is that we suspend payments.“, He claimed.
In the US, the debt ceiling is the total amount of money the government is allowed to borrow to meet its current legal obligations to finance Social Security and Medicare benefits, military salaries, interest on the national debt, tax returns, and other payments. From time to time, the United States may default on the national debt because, unlike other countries, the Executive Board can only lend up to the limit set by Congress, and Congress has the power to suspend that ceiling as it sees fit.
The United States has never had to pay off its national debt, but it came so close in 2011 that the prospect of that happening plunged financial markets into chaos and prompted Standard & Poor’s to downgrade the country’s credit rating.