In a sudden reversal after weeks of stubborn refusal to budge, President Joe Biden succumbed to pressure to meet House Speaker Kevin McCarthy (R-CA) and discuss the debt limit.
The pair will sit down on May 9th in a sharp rebuttal to the White House’s strident opposition to any negotiations over raising the debt ceiling. McCarthy was flying to Israel when he received the call from Biden offering to meet at the bargaining table.
The Treasury Department sounded the alarm that a potential default may be closer than previously expected. Secretary Janet Yellen sent a letter to Congress cautioning that the agency may be unable to meet its financial obligations as early as June 1 without congressional intervention.
This new potential deadline sent shock waves through Washington.
The country has never defaulted on its debts, and warnings abound that the unprecedented action would rattle the world economy.
The Biden White House claimed the Republican plan to responsibly lift the debt ceiling would “literally melt bones.”
Our plan claws back billions in unspent COVID money & limits spending levels to what they were just 4 months ago. It's not radical—it's responsible. pic.twitter.com/PffAwxiTpV
— Kevin McCarthy (@SpeakerMcCarthy) April 29, 2023
Biden also contacted House Minority Leader Hakeem Jeffries (D-NY), Senate Majority Leader Chuck Schumer (D-NY), and Senate Minority Leader Mitch McConnell (R-KY).
Many believe the White House was surprised that McCarthy was able to muscle his debt ceiling bill through the House last week.
The measure sought to provide Biden’s desired debt limit increase while offsetting the higher spending with deep cuts in federal outlays. McCarthy expended a sizable amount of political capital getting the bill passed by a scant 217-215 vote.
He weathered four GOP defections, the most he could afford and still see the bill through.
Biden has repeatedly demanded a “clean” increase of the debt ceiling and said any deviation is “not negotiable.” The willingness to sit with congressional leaders and at least discuss possibilities after months of stalling must be an encouraging sign for GOP leaders.
How far these talks will go is anyone’s guess. House Republicans are on the record opposing any shift away from proposed spending cuts, and McCarthy is under pressure to stick to his guns.
Many on both sides of the aisle believe it will be McConnell who ultimately ushers through an agreement to avoid default. He drew criticism in recent times for abandoning conservative positions and working with Biden on various deals.