January 31
By Susan Milligan
President Joe Biden has a message for new House Speaker Kevin McCarthy the day before a meeting between the two to discuss how to avoid a catastrophic default on the U.S. debt.
There really is no negotiating on raising the debt ceiling. Also, what the GOP is talking about would only make things worse.
A memo the White House released Tuesday morning says Biden will have two questions for McCarthy, a California Republican whose caucus is threatening to refuse to increase the debt ceiling without give-backs on the budget.
First, Biden will seek a commitment from McCarthy that he will ensure the country will pay its already-incurred debt, National Economic Council Director Brian Deese and Office of Management and Budget Director Shalanda Young said in the memo.
Secondly, Biden wants to know when Republicans will release their budget, which would show what programs the new House majority would cut to reduce the deficit and the debt.
“The United States must never default on its financial obligations. Raising the debt ceiling is not a negotiation; it is an obligation of this country and its leaders to avoid economic chaos,” Deese and Young wrote in the memo previewing the Wednesday meeting, the first one-on-one Biden will have with McCarthy since the tumultuous vote for speaker earlier this month.
McCarthy issued a terse response on Twitter.
“Mr. President: I received your staff’s memo. I’m not interested in political games,” the speaker tweeted. “I’m coming to negotiate for the American people.”
The memo reflects the increasingly stark comparisons with Republicans Biden has been making ahead of his State of the Union next Tuesday and his expected announcement that he will seek a second term as president.
While attacking Republicans for threatening to cut such popular programs as Social Security and Medicare, Biden has been touting his record as president, including passage of a bipartisan infrastructure law. The president will be in New York City Tuesday afternoon to promote the $292 million the law is providing for the Hudson Tunnel Project, which is projected to create 77,000 jobs.
The debt ceiling, once a pro forma vote, has become a vehicle for Republicans to demand cuts in the budget. Their argument is that if the country continues to spend on credit, the deficit and debt will only get worse, weakening the economy.
However, increasing the debt ceiling does not authorize any new spending; it merely ensures that the country has the ability to pay bills it has already run up because of spending Congress has already approved. Failure to raise the debt ceiling before the country actually runs out of money would result in massive job losses, an expensive decline in the country’s credit rating and other severe fiscal damage, economists warn.
The memo noted that Republicans did not object to increases in the debt ceiling when Donald Trump was president, and that “Speaker McCarthy’s unwillingness to-date to taking the threat of default off the table makes him an outlier, including among current and former leaders of his own party.” Senate Republican Leader Mitch McConnell, Kentucky Republican, for example, has said repeatedly that America must never default on its debt.
McCarthy has said publicly that the United States must not default on its debt. But both the speaker and the president must contend with a determined contingent within the Republican caucus that is adamant about getting budget cuts before agreeing to raise the debt ceiling. That same group nearly deprived McCarthy of his speakership, and under new House rules, a single member could force a “no-confidence” vote on McCarthy, imperiling his leadership post yet again.
Biden is scheduled to release his budget March 9. While the GOP has not said when it will offer its budget, legislation the House Republicans have proposed or already approved would actually increase the deficit by hundreds of billions of dollars over the next decade, the memo said. Those items include rescinding funding for the IRS, extending the Trump-era tax cuts and repealing Inflation Reduction Act provisions allowing for Medicare negotiations on certain drug prices and imposing a 15% minimum tax on high-earning corporations.