Biden and McCarthy Negotiate to Avoid National Default: Steps to Debt Limit Progress

by Joshua Brown
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President Joe Biden and House Speaker Kevin McCarthy have recently started important talks about not allowing the United States to fall into a never-before-seen level of debt. As a result, Biden chose to skip his upcoming trip abroad in order to close this possible deal before June 1st!

Now, new people are in charge of the discussions and they want to figure out what President White House and Speaker McCarthy will accept to let politicians increase the debt limit soon. After meeting with Vice President Biden and other top leaders, Speaker McCarthy said it is possible there will be a deal by this Friday. But for now, the two sides haven’t reached agreement yet.

President Biden was really happy after a meeting in the White House which lasted about an hour. However, he had to cancel parts of his upcoming trip that begins Wednesday – the Australia and Papua New Guinea portions. He will still attend a summit with the Group of Seven countries in Japan, but he’ll come back to Washington on Sunday.

President Biden said that there is still some work to be done, but he is talking to the Speaker of the House (the leader of the country’s law-making body) and other important people from Congress every day. These people, which include top aides to four congressional leaders – along with White House officials – are meeting daily so that nobody would have to default on payments.

The President’s counselor, Office of Management and Budget Director, and legislative affairs director are now in charge of negotiations for the Democratic side, while a Congressman from Louisiana who is also very close with Speaker McCarthy is going to speak on behalf of the Republicans. When he returned to work in the Capitol, McCarthy said they have everything ready so that all sides know what their roles are.

Negotiators are working hard to complete their tasks before the June 1st deadline. That’s because if they don’t, the US might have to break a record and not pay its debts for the first time ever, which could lead to some very serious financial problems. Vice President Biden is going to visit soon in an extra effort to get everything done on time.

People from the White House have tried to make the effects of cancelling Biden’s trip less severe. John Kirby, a spokesperson from the National Security Council said that Biden has already had meetings with some important leaders in Japan, and he has now invited Australia’s Prime Minister Anthony Albanese for an official visit in Washington.

Kirby said that if Congress did what it was supposed to do, like it always has in the past (raise the debt ceiling), then we would not be talking about how this debate is affecting our trip.

The President of the Democratic party and the speaker of the Republican party are arguing about the debt ceiling. President Biden is refusing to discuss it, while Speaker McCarthy wants to reduce spending or there could be a very bad outcome if he does not get what he wants. It looks like they may agree on certain things, though.

The people who are talking have listed a few things that they want to do. They want to get back about 30 billion dollars from the COVID-19 money that has not been used yet, as well as put limits on future budgets, make it easier to build energy sources, and require extra work activities for those receiving aid from the government.

Politicians in Congress are worried about the President’s proposal to create stricter rules for people who get help from the government. The President’s team is not in favour of making tougher rules for people on Medicaid or food stamp programs, but they might be willing to make changes for those getting Temporary Assistance for Needy Families payments.

House Democrats had a private meeting this morning and they did not like the idea of having to do more work. In fact, they strongly rejected it.

Lawmakers who support progress in society have been talking about this issue. Rep. Pramila Jayapal, the leader of the Congressional Progressive Caucus, said that they don’t want spending cuts or any rules that might hurt people – especially those living in rural areas, or people from black, brown, or indigenous backgrounds.

The staff of Democratic leader Jeffries was trying to make people not worry on Monday. Another group of Democrat lawmakers who were more in the middle showed signs that they want to work together with the moderate Republicans to agree on a deal about the debt ceiling, according to what was heard on Tuesday from helpers.

Kevin McCarthy, the Republican House leader, has been complaining that talks with President Biden aren’t going well as it’s taken more than 100 days to even begin meeting up. However, President Biden argued that the Republicans didn’t have a budget ready in the first place so it took them such a long time to release their own plan. Treasury Secretary Janet Yellen added that this places huge pressures on Washington to make an agreement quick as estimates still show when the US will run out of money soon.

In a letter sent to the House and Senate, Yellen indicated that it’s possible for the government to delay an “national default,” meaning that although estimates predict when the money will run out, it could be later than those predictions.

“Yellen said on Tuesday that it is really important for Congress to act soon. Economists all agree with her that if the United States does not pay what they owe, it would be a disaster for people and their finances.”

The time left is limited. Congress has only a few days until they take a break, but that might change if an agreement between the White House and McCarthy is made.

Congressional leaders need some time to see how the average lawmakers feel about any agreement. It’s not sure if the plan that is coming together will make a lot of members in the House, led by McCarthy, happy or if enough Democrats agree on it to make this deal happen.

Republicans, led by Senator McCarthy, want the President Biden to accept their idea of cutting back spending and limiting how much money the government can use in the future. They say that only the House has taken action to bring up the limit on how much debt can be held by the US. But it’s almost certain that this change will not go through in the Senate where Democrats have control and Biden said he won’t sign off on it either.

Having an increase in the debt limit won’t mean that the government can start spending more money. All it means is that they will be allowed to borrow money so they can pay for what they’ve already said they would.

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