President Joe Biden and Vice President Kamala Harris met with congressional leaders at the White House on Tuesday to discuss raising the debt ceiling as the U.S. inches closer to a potential default on the national debt in the coming weeks.
“It is possible to get a deal by the end of the week. It’s not that difficult to get to an agreement. When you think about ‘Limit, Save, Grow,’ the bill we passed, we raise the debt ceiling, we cap future spendings, we grow our spending in Congress by 1% each year. That gives you trillions of dollars of savings,” House Speaker Kevin McCarthy, R-Calif., said following the meeting when asked about a possible deal on the debt ceiling by the end of this week.
McCarthy was joined at the White House by his fellow congressional leaders, House Minority Leader Hakeem Jeffries, D-N.Y.; Senate Majority Leader Chuck Schumer, D-N.Y.; and Senate Minority Leader Mitch McConnell, R-Ky.
The House of Representatives on April 26 passed the Limit, Save, Grow Act of 2023, which aims to “limit federal spending, save taxpayer dollars,” and “grow the economy.” The legislation passed 217-215 in the House, but did not get a single vote from any Democrat.
“We bring back money that we have already appropriated from the taxpayer that wasn’t spent in a pandemic,” McCarthy said. “We put in work requirements that the president voted for as a senator, that in Wisconsin just a couple months ago passed by 82%. It lifts people out of poverty, put them into jobs. What that does is helps our supply chain.”
“So, no longer do we borrow money from China to pay people not to work, and the only thing we’re talking about are able-bodied people with no dependents. That’s all you’re talking about. It’s already in place in certain areas,” McCarthy said. “And so, then we make ourselves more energy independent. We change the red tape that we can actually build things in America.”
Biden previously met with the four congressional leaders on May 9. Since then, congressional staff have been working every day on a debt ceiling deal, CNBC reported. The president and the four top congressional leaders were supposed to meet this past Friday, but the meeting was postponed.
“We don’t have much time, but default is just the worst, worst alternative,” Schumer said after Tuesday’s meeting. “Having a bipartisan bill in both chambers is the only way, the only way, we’re going to avoid default. Hakeem and I are committed to trying to get that bipartisan bill done.”
Jeffries also spoke about the meeting, which he described as “positive.”
“I thank the president for once again convening us. It was an open and an honest, but a very cordial, discussion,” Jeffries said. “We all agreed that the only path forward is to reach a bipartisan agreement anchored in common ground.”
“We all agreed that default is not an acceptable option and must be avoided, and we all agreed that over the next few weeks we have to proceed with ‘the fierce urgency of now’ in order to make sure we can reach that bipartisan, commonsense, common-ground agreement so that we can protect the health, the safety, and the economic well-being of the American people,” Jeffries said.
Biden will leave for the Group of Seven summit in Japan on Wednesday, but will return early to the U.S. on Sunday for the ongoing debt ceiling talks, CBS News reported. The president will not travel to Papua New Guinea or Australia as planned, CBS also reported.
Treasury Secretary Janet Yellen again raised concerns about the debt ceiling on Monday in letters to McCarthy, Jeffries, Schumer, and McConnell.
“In my May 1 letter, I noted that our best estimate was that Treasury would be unable to continue to satisfy all of the government’s obligations by early June if Congress does not raise or suspend the debt limit before that time,” Yellen said. “In that letter, I also noted that while it is impossible to predict with certainty the exact date when Treasury will be unable to pay all the government’s bills, I would continue to update Congress as more information becomes available.”
“With additional information now available, I am writing to note that we still estimate that Treasury will likely no longer be able to satisfy all of the government’s obligations if Congress has not acted to raise or suspend the debt limit by early June, and potentially as early as June 1,” Yellen said.
E.J. Antoni, a research fellow in regional economics in the Center for Data Analysis at The Heritage Foundation, weighed in on Yellen’s letter. (The Daily Signal is the news outlet of The Heritage Foundation.)
“It is good to see Yellen tone down the hyperbolic rhetoric, at least a little, by not mentioning a default. However, her estimate of June 1 as the ‘X date’ may be overly optimistic,” Antoni told The Daily Signal in a written statement. “Last Friday’s Daily Treasury Statement indicated that the Treasury General Account at the Fed would run dry by May 25 at the current pace of decline. Since both receipts and outlays are somewhat volatile, the date could easily come a week earlier or later than that.
“It is a shame that Yellen does not express the same concern for excess borrowing that she has for the ability to go further into debt,” Antoni said. “Failing to raise the debt ceiling will still allow the Treasury to pay for essential services. There will be a partial government shutdown, not financial Armageddon.”
Antoni added, “Conversely, if the nation continues down this path of perpetual spending, borrowing, and printing of money, the eventual results will make the last three years look like a walk in the park.”
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