Thursday, July 25, 2024

Biden, Legislative Leaders Slated to Meet Tuesday on Debt Limit

'I remain optimistic because I’m a congenital optimist... '

(By Brett Rowland, The Center Square) President Joe Biden and congressional leaders are expected to meet again Tuesday, 16 days before the United States is projected to default on its debt.

Republicans have said they won’t agree to raise the debt limit without spending cuts. House Republicans recently passed a bill to reduce spending by almost $5 trillion and increase the debt limit by about $1.5 trillion, or until March 31, 2024, whichever comes first.

The Republican bill would strip energy and environmental tax credits from the Inflation Reduction Act and formally block Biden’s student loan cancellation. It also would put work requirements in place for some federal social programs, such as requiring Medicaid recipients to work 80 hours per month.

Biden was asked about work requirements Sunday evening at Gordons Pond State Park near Rehoboth Beach, Delaware.

“I voted for tougher aid programs that’s in the law now, but for Medicaid it’s a different story,” Biden said. “And so I’m waiting to hear what their exact proposal is.”

Biden and Democrats have said Congress must raise the debt limit before discussing changes to spending or other budget changes.

On Sunday, Biden said that while it “never is good to characterize a negotiation in the middle of a negotiation,” he was optimistic.

“I remain optimistic because I’m a congenital optimist,” he said. “But I really think there’s a desire on their part, as well as ours, to reach an agreement, and I think we’ll be able to do it.”

Biden said he would meet with House Speaker Kevin McCarthy, House Minority Leader Hakeem Jeffries, Senate Majority Leader Chuck Schumer and Senate Minority Leader Mitch McConnell on Tuesday at the White House. A meeting set for Friday had been canceled.

U.S. Treasury Secretary Janet Yellen said lawmakers must raise the debt ceiling by June 1 or risk a default on U.S. debt obligations.

The U.S. government faces a significant risk of not being able to pay its bills in the coming weeks without an increase to the debt limit, the Congressional Budget Office said Friday.

The debt ceiling is the maximum amount of debt the U.S. Department of the Treasury can issue.

“The Congressional Budget Office projects that if the debt limit remains unchanged, there is a significant risk that at some point in the first two weeks of June, the government will no longer be able to pay all of its obligations,” according to a CBO report released Friday.

The CBO report warned of consequences if the U.S. were to come up short on cash: “Those actions could result in distress in credit markets, disruptions in economic activity, and rapid increases in borrowing rates for the Treasury.”

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