TIMES.VG

BVI, Caribbeanand International News
TIMES.VG

As a default crisis looms, Biden and McCarthy hope to break the US debt-ceiling impasse

As a default crisis looms, Biden and McCarthy hope to break the US debt-ceiling impasse

President Joe Biden and top Republicans and Democrats in Congress are scheduled to meet this week in an attempt to break a three-month deadlock over the $31.4 trillion US debt ceiling and prevent a devastating default before the end of May.
President Joe Biden and top Republicans and Democrats in Congress are scheduled to meet this week in an attempt to break a three-month deadlock over the $31.4 trillion US debt ceiling and prevent a devastating default before the end of May.

The Democratic president is urging Congress to increase the federal government's self-imposed borrowing cap without conditions. Republican House Speaker Kevin McCarthy has stated that any agreement that does not include spending cuts to address the nation's increasing fiscal deficit will be rejected.
For the first time since February 1, Biden will meet with McCarthy at the White House on Tuesday, along with Senate Majority Leader Chuck Schumer and senior Senate Republican Mitch McConnell. Hakeem Jeffries, the top Democrat in the House, will also participate in the negotiations.

Analysts do not anticipate a speedy agreement to avert a historic default, which the Treasury Department has warned may occur as early as June 1. Forecasters warn that a default would likely plunge the US economy into a catastrophic recession, with unemployment skyrocketing.

However, the start of active talks may calm the worries of investors who compelled the federal government to pay its highest interest rate ever for a one-month debt issue last week.

"We now have a lot of foamy water. We must calm them down. "Some of that could simply be saying, 'We've found areas of agreement, areas of disagreement, we're going to get back together and work on a solution,'" Republican Senator Thom Tillis told reporters late last week.

Outside observers, including people who have participated in previous budget negotiations and industry lobbying groups, have proposed a variety of potential agreements, the most of which revolve around extending the debt ceiling through the November 2024 presidential elections while freezing spending.

Legislative gridlock is nothing new in a country divided by profound partisanship, where Republicans have a razor-thin House majority and Biden's Democrats control the Senate by a mere two votes.

The stakes of the debt-ceiling dispute, though, are substantially higher than the budgetary debates that have forced partial government shutdowns three times in the last decade.

"That is excruciating. It is challenging. But, unlike previous shutdowns, it is not disastrous," Democratic Senator Chris Coons said, adding that "default would be devastating."

For months, Biden has emphasized that extending the debt ceiling, which is required to cover the expenses of already approved spending and tax cuts by Congress, should not be linked to budget talks.

"The two are totally unrelated," Biden stated on Friday. "They're two distinct issues." Let's get one thing straight."

DEADLINE IS UNCERTAIN
McCarthy has urged Democrats to either offer their own plan or vote on a House-approved package that would impose sharp spending cuts over the next decade and new work requirements on benefit recipients in exchange for raising the debt ceiling by $1.5 trillion or until the end of March.

Biden submitted a budget in March that aimed to reduce deficits by $3 trillion over ten years by boosting taxes on corporations and individuals earning more than $400,000 per year.

Lawmakers confront an uncertain deadline: the Treasury warned last week that it may be unable to pay all of its debts by June 1, but may be able to do so for several weeks beyond.

The Bipartisan Policy Center, a research tank specializing on budget issues, is scheduled to produce its own revised forecast on Tuesday, which may complicate negotiations further if it is released later than Treasury's.

The last time the country came this close to default was in 2011, when the country had a divided government with a Democratic president and Senate and a Republican-led House.

Congress eventually came around and avoided default, but the economy was hit hard, including the first-ever reduction of the US' top-tier credit rating and a severe stock selloff.

Financial markets have already begun to feel the strain of the standoff, but a default would have a far more direct impact on ordinary Americans.

"The thing for everyday folks is that declines in retirement savings, increases in interest rates that could affect their monthly payments for cars or houses - it's just going to hurt a lot of people, and it's going to hurt low- and middle-income people the most," Democratic Senator Tim Kaine said.

Adding to the difficulty of reaching an agreement, McCarthy agreed to a change in House rules that permits only one member to call for his ouster as speaker, giving hardliners more authority, including the roughly three dozen members of the House Freedom Caucus.
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

TIMES.VG
Close
0:00
0:00
Nvidia Joins Tech Giants as First Chipmaker to Reach $1 Trillion Valuation
Drone Attack on Moscow's Wealthiest Neighborhoods Suspected to be Launched by Ukraine
Elon Musk Meets Chinese Finance Minister in Beijing
AI ‘extinction’ should be same priority as nuclear war – experts
Prominent Hacker Forum RaidForums Suffers Substantial Data Breach
Nvidia CEO Huang says firms, individuals without AI expertise will be left behind
WPP Revolutionizes Advertising with NVIDIA's AI Powerhouse
Two US Employees Fired For Chasing Robbers Out Of Store As They Broke ''Company Policy''
If you donated to BLM, you got played
Pfizer, the EU, and disappearing ink - Smoke, Mirrors, and the Billion-Dose Pfizer Vaccine Deal: EU's 'Open Secret
Actor Tom Hanks told Harvard University graduates to be superheroes in their defense of truth and American ideals, and to resist those who twist the truth for their own gain
The Sussexes' Royal Rebound: Could Harry and Meghan Markle Return to the UK?
A provocative study suggests: Left-Wing Extremism and its Unsettling Connection to Psychopathy and Narcissism
France Arrests 10 on Suspicion of Failing to Respond in Time to Migrant Drowning
Neuralink Receives FDA Approval for First-in-Human Clinical Study
Is Saudi Arabia the holiest place in the world? Ancient Hebrew Inscriptions from "The Mount Sinai Stand" Discovered in Saudi Arabia
Ukrainian Intelligence Official Admits to Assassination Attempts on Putin
Bernard Arnault Loses $11.2 Billion in One Day as Investors Fear Slowdown in US Growth Will Reduce Demand for Luxury Products
Russian’s Wagner Group leader: “I am not a chef, I am a butcher. Russia is in danger of a revolution like in 1917.”
TikTok Sues Montana Over Law Banning the App
Ron DeSantis Jumps Into 2024 Presidential Race, Setting Up Showdown With Trump
Last Walmart in North Portland Closing Down
Florida's DeSantis seeks to disqualify judge in Disney case
Talks between US House Republicans and President Biden's Democratic administration on raising the federal government's $31.4tn debt ceiling have paused
Biden Administration Eyeing High-Profile Visits to China: The Biden Administration is heating things up by looking into setting up a series of top-level visits to Beijing by top officials in the coming months
New evidence in special counsel probe may undercut Trump’s claim documents he took were automatically declassified
A French court of appeals confirmed former President Nicolas Sarkozy's three-year jail term for corruption and influence peddling
Debt Ceiling Crises Have Unleashed Political Chaos
Weibao Wang, a former software engineer at Apple, was charged with stealing trade secrets related to autonomous systems, including self-driving cars
Mobile phone giant Vodafone to cut 11,000 jobs globally over three years as new boss says its performance not good enough
Elon Musk compares George Soros to Magneto, the supervillain from the Marvel Comics series.
Warren Buffett Sells TSMC Shares Over Concerns About Taiwan's Stability
New Study Finds That Secondary Bacterial Pneumonia Is a Major Cause of Death in COVID-19 Patients Who Require Ventilator Assistance
The Prime Minister of St. Vincent and the Grenadines calls the British monarchy "an absurdity" he wants to remove in his lifetime
King Charles III being crowned.
'Godfather Of AI' Geoffrey Hinton Quits Google To Warn Of The Tech's Dangers
A Real woman
Vermont Man Charged with Stalking After Secretly Tracking Woman with Apple AirTag
Elon Musk Statements About Tesla Autopilot Could Be 'Deepfakes,' Lawyers Claim. Judge Evette Pennypacker Does Not Understand How Far and Advanced This Technology Became
Ukraine More Prepared for Counterattack as Reinforcements Arrive
UK Prime Minister Rishi Sunak and Italian Prime Minister Giorgia Meloni Discuss Migration, Defence, and Ukraine
AT&T's Successful Test of Satellite-Based Phone Call Raises Possibility of Widespread Coverage
CNN: "Joe Biden is asking for four more years — when 74% of Americans think the country is heading the wrong way“
Turkish President Recep Tayyip Erdogan Cuts Short Live TV Interview Due to Health Issue
US Congresswoman threaten Twitter Files journalist with arrest
Pulitzer Prize-winning journalist Seymour Hersh slams New York Times' pro-government stance and treatment of sources
Enough is enough: it's time to end the war in Ukraine. While Russia may be to blame for starting it, Russia is not the one refusing to stop it
Fox News Settles their case with Dominion Voting Systems for a staggering $787.5 MILLION
AG decries scapegoating and rushed lawmaking by government
The land of the free violence
×