Biden, McCarthy Trying To Avoid US Default

Sunday, May 21, 2023 | Tag Cloud

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By Stefan J. Bos, Chief International Correspondent Worthy News

WASHINGTON/HIROSHIMA (Worthy News) – President Joe Biden and top Republican Kevin McCarthy spoke by phone Sunday to prevent the first default in U.S. history.

They appeared to have a change of tone in stalled talks on a deadlock over raising the whopping $31.4 trillion U.S. debt limit.

If the emerging June 1 deadline is missed, the U.S. Treasury could run out of money to pay the government’s bills, including for federal and military employees, tax refunds, and Social Security payments to millions of pensioners.

However, McCarthy said his call with Biden, who was returning from the Group of Seven (G7) summit in Hiroshima, Japan, had been “productive,” and the two would meet on Monday.

Yet two sides remain at odds over budget cuts demanded by the Republicans as a condition for raising the ceiling.

Republicans said earlier they were ready to increase the debt limit by a maximum of $1.5 trillion.

In exchange, they demand reduced funding for federal agencies to 2022 fiscal year levels and limit spending growth to 1 percent annually over the next 10 years.


Republican lawmakers argued this would lead to $4.8 trillion in savings.

The plan would end several of Biden’s legislative priorities, including student loan forgiveness, potentially complicating his efforts to be re-elected by Democratic voters to the White House in 2024.

As he left Japan on Sunday, Biden told reporters that proposals by Republicans – who control the House of Representatives – were “simply, quite frankly, unacceptable.”

He added: “It’s time for Republicans to accept that there is no bipartisan deal to be made solely, solely on their partisan terms. They have to move as well.”

But Biden also made clear he would be willing to cut spending to reach a deal, and he would speak to McCarthy on his way home.

The president canceled foreign visits, including to Australia, that were due to follow the three-day summit in Hiroshima to deal with the impasse over the federal debt.

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