US President Joe Biden called on Republicans to moderate their “extreme positions” as he vowed to speak directly to House Speaker Kevin McCarthy on Sunday in a bid to ease tensions in the spiraling US debt ceiling crisis.
At a news conference in Hiroshima, Japan for the G7 leaders’ summit on Sunday, Biden said he plans to hold a call with McCarthy during his trip to Washington to see if negotiations can get back on track.
“I think he’s going to want to engage with me directly to make sure we’re all on the same page,” Biden said. It is time for Republicans to accept that no bipartisan deal is made solely on their partisan terms. They should move as well.”
The lack of any movement in the talks will be a concern because the government borrowing cap must be lifted by June 1 or Washington faces an unprecedented default on US debt. Such a prospect could plunge global markets into turmoil and the US economy into recession.
Janet Yellen, US Treasury Secretary, warned Sunday that if the debt ceiling is not raised soon, there will be “difficult choices to make about unpaid bills.”
Any debt ceiling agreement would take several days to pass the House and Senate and be signed by the president. Even an approaching deadline could spook investors and lead to economic turmoil — and hardline rhetoric would create uncertainty and anxiety about the outcome of the talks.
During his remarks in Hiroshima, Biden said his administration considered the Fourteenth Amendment to the United States Constitution, which states that the “validity” of American debt “shall not be questioned.” This would allow the Treasury to ignore the borrowing limit rather than default.
“I think we have the authority. The question is can this be done and cited at the right time.
But such a move could lead to major market turmoil and a series of legal challenges, and Biden has indicated it would be unenforceable. “We haven’t come up with a unilateral measure that will work in two weeks, so it’s up to the lawmakers,” he said.
Yellen echoed Biden’s comments Sunday, telling NBC News that while there has been “a lot of discussion” about the 14th Amendment, “it doesn’t seem like something that could be used appropriately in these circumstances, given the legal uncertainty.”
“Given the tight time frame we’re in . . . my sincere hope is that Congress will raise the debt ceiling.
On Saturday, McCarthy poured cold water on any hope of breaching the market calm, saying there could be no progress until Biden returned to Washington late Sunday from Japan.
McCarthy said, “I don’t think we’re going to be able to move forward until the president can come back into the country.” “Unfortunately, the White House has stepped back,” he added, saying that the “socialist wing” of the Democratic Party had a “real impact” on Biden’s negotiating position.
Biden is not expected to return to the White House until 11 p.m. local time on Sunday.
Given the negative economic fallout from default, as well as the unexpected political impact, it is still expected that Biden and congressional Republicans will reach an agreement eventually.
Many in Washington say the setback in the talks, coupled with pressure not to concede from factions within the Democratic and Republican parties, could be a necessary precursor to a final deal, not a sign that the talks are seriously deviating. turn.
To agree to increase the debt ceiling, Republicans would push for deep spending cuts over 10 years, while Democrats would accept more limited budget cuts over a shorter period of time. They also clashed over imposing new labor requirements for social spending programmes.