Jan. 21 (UPI) — President Joe Biden “looks forward” to meeting with House Speaker Kevin McCarthy to discuss a range of issues but will not negotiate on raising the U.S. debt ceiling, the White House says.
House Republicans led by McCarthy have indicated they will seek deep spending cuts before agreeing to raise the debt ceiling, a procedural move which is needed for the federal government to meet its existing debt obligations.
The United States hit its national debt limit of $31.4 trillion Thursday and Treasury Secretary Janet Yellen notified congressional leaders that she is implementing “extraordinary measures” to meet those payments.
McCarthy in a Tweet posted Friday said he is willing to meet with Biden to “discuss a responsible debt ceiling increase to address irresponsible government spending,” but White House press secretary Karine Jean-Pierre afterwards reiterated there would be “no negotiations” on whether or not to raise the debt ceiling.
“President Biden looks forward to meeting with Speaker McCarthy to discuss a range of issues, as part of a series of meetings with all new Congressional leaders to start the year,” she said in an issued statement.
But, she added, “Like the President has said many times, raising the debt ceiling is not a negotiation; it is an obligation of this country and its leaders to avoid economic chaos. Congress has always done it, and the President expects them to do their duty once again. That is not negotiable.”
Biden has demanded that he be presented with a “clean” bill to raise debt limit.
The back-and-forth came after Biden earlier Friday indicated that he would speak with McCarthy on the topic while also issuing a dire warning that failing to raise the debt ceiling would be an economic “calamity.”
“If we don’t meet our national debt and renege for the first time, we have a calamity that exceeds anything that’s ever happened financially in the United States,” Biden said at the White House, according to Bloomberg and Politico.
“The debt we’re paying on — and we’re going to have a little discussion about that with the new majority leader of the House — has accumulated over 200 years.” he said.
A default on U.S. debt obligations caused by a political disagreement would have “serious and protracted financial and economic effects” as financial markets lose faith in the United States, the White House has warned.
Among the consequences, economists say, would be a weakening dollar, a falling stock market and a downgraded U.S. credit rating.
Meanwhile, interest rates “would broadly rise for many consumer loans, making products like auto loans and mortgages more expensive for families who are subject to interest rate changes or taking out new loans,” the president’s Council of Economic Advisers warned last year.
“These and other consequences could trigger a recession and a credit market freeze that could hurt the ability of American companies to operate,” they said.
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