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McCarthy seeks meeting with Biden on debt ceiling amid stalled talks

U.S. could default on its debt this summer
Congressional Budget Office warns U.S. could default on its debt as early as July 05:25

Washington — House Speaker Kevin McCarthy on Tuesday called on President Biden to hold another round of talks over a deal to raise the debt ceiling, warning that the White House is "putting an already fragile economy in jeopardy" by refusing to consider pairing cuts to federal spending with lifting the nation's borrowing authority.

McCarthy said in a letter to Mr. Biden that he is prepared to sit down with the president to discuss ways to limit government spending and reduce the national debt to grow the economy, and warned that the U.S. is fast-approaching its deadline to avoid a catastrophic default on its debt obligations.

"Mr. President, simply put: you are on the clock," the Republican leader wrote. "It's time to drop the partisanship, roll up our sleeves, and find common ground on this urgent challenge."

The U.S. hit its $31.4 trillion borrowing authority in January, leading the Treasury Department to initiate "extraordinary measures" to keep paying the bills. But those measures will be exhausted as soon as July, according to the Congressional Budget Office, and the U.S. is at risk of a first-ever default absent congressional action.

Republicans have said an increase to the debt limit must be tied to spending cuts. But the White House has called on Congress to pass a clean bill lifting the debt ceiling with no trade-offs, setting the two sides on a collision course.

White House press secretary Karine Jean-Pierre said in response to McCarthy's letter that Mr. Biden "welcomes a separate conversation about our nation's fiscal future," but again urged GOP lawmakers to pass legislation that only deals with the debt ceiling.

"Congress has a constitutional obligation to address the debt limit — as they did three times in the previous administration without conditions. Business leaders and economists have warned that the threat of a default risks the livelihoods of American small businesses, retirees, and working families and would hand a massive win to China — and recent events underscore the need for Congress to address the debt limit as soon as possible," she said in a statement.

The White House is also pushing Republicans to put forth their own budget detailing their proposed spending cuts, and Jean-Pierre criticized McCarthy for failing to do so.

"All we've heard from them is a list of devastating cuts to law enforcement and border security and proposals to take health care away from Americans and raise health care and child care costs," she said. "All to pay for their tax giveaway to the super-wealthy and corporations. In fact, their proposals don't reduce the deficit at all."

McCarthy in his letter chastised Mr. Biden for refusing to budge from his position and said it "could prevent America from meeting its obligations and hold dire ramifications for the entire nation."

"I have no interest in brinksmanship — only in doing what is best for the American people," the speaker said. "We cannot solve the nation's fiscal problems overnight, and House Republicans are not demanding we do so. But we cannot continue to kick the can down the road and ignore America's ballooning national debt, all while you continue to spend trillions more, including through unaccountable executive fiat."

McCarthy included several proposals that he said would spur economic growth, including: reducing non-defense government spending to "pre-inflationary levels" and limiting out-year growth; reclaiming unspent COVID-19 funds; strengthening work requirements for adults without dependents who receive federal aid; and implementing policies to lower energy costs, make the U.S. energy independent and secure the country's southern border. 

McCarthy and Mr. Biden met privately in early February to discuss the looming fight over the debt ceiling, which was their first one-on-one meeting since the California Republican claimed the speaker's gavel at the start of the new Congress. Negotiations over a deal to raise the debt limit have not progressed as Republicans and the White House have hardened their positions. 

Noting the time that has passed since their meeting, McCarthy accused Mr. Biden and his aides of being "completely missing in action on any meaningful follow-up to this rapidly approaching deadline."

House Democrats have defended the White House's stance and accused Republicans of playing games with the economy.

"What House Republicans are engaging in is just not responsible. They need to put their budget out, they need to tell us what they value and that needs to be confined," Rep. Pete Aguilar, chair of the Democratic caucus, told reporters Tuesday. "But the full faith and credit of the United States government should not be in question. The United States pays its bills."

Referencing McCarthy's suggested ways to grow the economy, Aguilar said, "bullet points don't make a budget."

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