Reports surfacing on Monday indicated Joe Biden has invited House Speaker Kevin McCarthy (R-CA) to negotiate the debt limit during a meeting scheduled for May 9. This move starkly contrasts the White House’s prior stance, as White House press secretary Karine Jean-Pierre previously stated, “We are not negotiating on this.”
Despite being in Israel, McCarthy received a call from Biden to schedule a meeting regarding the debt limit following days of stonewalling tactics. Earlier, McCarthy and House Republicans had successfully passed a bill to raise the debt limit, catching the Biden administration off guard.
Those who support a clean debt ceiling are ignoring fiscal & economic realities.
We're running up debts faster than we’ll EVER have an ability to pay off.
China's trying to negotiate AROUND the US dollar to remove us from world currency reserve status.
These are MAJOR issues. pic.twitter.com/EbtITSVn5D
— Congressman Byron Donalds (@RepDonaldsPress) April 30, 2023
Initially, Jean-Pierre dismissed the House’s bill as “a recipe for economic disaster,” urging House Republicans to fulfill their constitutional duty. However, the White House’s position began to shift, and Biden called McCarthy just an hour after the press briefing.
While Biden and McCarthy gear up for negotiations, Senate Majority Leader Chuck Schumer (D-NY) plans to hold hearings on the House bill to condemn it publicly. Schumer has yet to enact his own legislation or vote on the House’s bill.
The White House’s change in strategy can be attributed to two factors. First, Treasury Secretary Janet Yellen revealed that the United States could risk default as early as June 1 if the debt ceiling is not increased. This alarming news means that Biden and congressional leaders have less time to reach a deal and resolve the crisis.
Second, McCarthy’s House passed spending cuts alongside a debt limit extension of $1.5 trillion, or until March 31, 2024 – whichever comes first. This development occurred much earlier than Democrats had anticipated. The Democratic Senate has yet to pass a clean debt ceiling extension.
Fasten your seatbelt https://t.co/rv83U1JkdS
— Emil Møller (@EmilMoller10) May 1, 2023
The White House had initially appeared confident that Democrats could win this argument. Still, Biden faces significant risks from a potential default. In addition, poor approval ratings on the economy could worsen, jeopardizing his reelection prospects.
Recent polls have shown that the GOP position aligns with public opinion, indicating that Biden should agree to negotiations and try to find common ground around the debt ceiling. For example, the Echelon Insights poll found that 74% of respondents supported this approach, as opposed to the 26% who believed Biden should insist on a “clean” increase.
As Biden’s presidency and McCarthy’s speakership hang in the balance, Yellen warned that waiting until the last minute to address the debt limit could have disastrous consequences, including severe hardship for American families and damage to the nation’s global leadership position.
With Biden’s invitation to McCarthy, the two sides are inching closer to resolving the debt limit impasse. As negotiations proceed, the nation eagerly awaits the outcome, which will undoubtedly profoundly impact the country’s short- and long-term financial future.