US debt ceiling talks ‘productive’ as Biden and
McCarthy to meet 10 days from deadline
A Sunday night phone call between the president and
Republican House speaker was reported to have struck a more positive tone
Reuters
Sun 21 May
2023 19.46 EDT
US
president Joe Biden and House Republican speaker Kevin McCarthy have held a
“productive” phone call on the continued impasse over the debt ceiling and
promised to meet on Monday after Biden returned to Washington.
McCarthy,
speaking to reporters after the call, said there were positive discussions on
solving the crisis and that staff-level talks were set to resume later on
Sunday.
Asked if he
was more hopeful after talking to the president, McCarthy said: “Our teams are
talking today and we’re … meeting tomorrow. That’s better than it was earlier.
So, yes.”
‘The silver
lining in this dangerous, avoidable situation is that it would take time for
things to get really, really bad.’
Biden, who
arrived back at the White House late on Sunday evening after his trip to Japan,
said the call with McCarthy had gone well. “We’ll talk tomorrow,” he said.
Speaking
from the G7 summit in Japan on Sunday, Biden said he would be willing to cut
spending together with tax adjustments to reach a deal, but the latest offer
from Republicans on the ceiling was “unacceptable.”
Less than
two weeks remain until the 1 June deadline, upon which the Treasury department
has said the federal government could be unable to pay all its debts.
Without
raising the debt limit, the US government will default on its bills, a historic
first, with likely catastrophic consequences. Federal workers would be
furloughed, global stock markets would crash and the US economy would probably
drop into a recession.
McCarthy’s
comments on Sunday struck a more positive tone than the heated rhetoric of
recent days which has seen talks stall.
“Much of
what they’ve already proposed is simply, quite frankly, unacceptable,” Biden
told a news conference in Hiroshima. “It’s time for Republicans to accept that
there is no bipartisan deal to be made solely, solely on their partisan terms.
They have to move as well.”
The
president later tweeted that he would not agree to a deal that protected “Big
Oil” subsidies and “wealthy tax cheats” while putting healthcare and food
assistance at risk for millions of Americans.
He also
suggested some Republican lawmakers were willing to see the US default on its
debt in the hope that the disastrous results would prevent Biden from winning
re-election in 2024.
After
Sunday’s call, McCarthy said while there was still no final deal, there was an
understanding to get negotiators on both sides back together before the two
leaders met: “There’s no agreement. We’re still apart.”
“What I’m
looking at are where our differences are and how could we solve those, and I
felt that part was productive,” he told reporters.
McCarthy
has said Republicans backed an increase in the defence budget while cutting
overall spending, and that debt ceiling talks have not included discussions
about tax cuts passed under former president Donald Trump.
Ahead of
the call with McCarthy, Biden stressed that he was open to making spending cuts
and said he was not concerned they would lead to a recession, but he could not
agree to Republicans’ current demands.
Last month,
the Republican-controlled House passed legislation that would cut a wide swath
of government spending by 8% next year. Democrats say that would force average
cuts of at least 22% on programs like education and law enforcement, a figure
top Republicans have not disputed.
Republicans
hold a slim majority in the House and Biden’s fellow Democrats have narrow
control of the Senate, so no deal can pass without bipartisan support. But time
is running out, as Monday’s meeting will take place with just 10 days left to
hammer out a deal before hitting Treasury’s deadline.
McCarthy
has said he will give House lawmakers 72 hours to review an agreement before
bringing it up for a vote.
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