In the meantime, the top Democrat and the highest-ranking Republican have met, on a Wednesday that was varied for Joe Biden.
In the morning, FBI officials checked his beach house in Delaware for confidential papers from his time as vice president or senator. They apparently found nothing, unlike his previous offices and private residence in Wilmington. He later welcomed his new chief of staff, Jeff Zients, to the White House and said goodbye to his predecessor, Ron Klain. In between, Kevin McCarthy stopped by. It was not least about a crazy number.
McCarthy has been Speaker of the House of Representatives since the beginning of January, in which the Republicans again have a narrow majority. Fifteen rounds were needed for his election because radical parts of his own party opposed him until the candidate had promised them everything possible.
The debt limit was already reached on January 19th
There were very likely also wishes for the debt limit, an issue that McCarthy now addressed during his first official visit speakers discussed with the US President. The limit is currently an incredible 31.38 trillion US dollars, 14 digits, that’s how much money the respective government can borrow in consultation with Congress.
This peak was reached on January 19th. Treasury Secretary Janet Yellen then took what she called “extraordinary measures” to buy time. They are accounting maneuvers to cushion payments for the time being, in such cases it is routine. However, the debt limit would have to be raised by June, otherwise the world’s largest economy could become insolvent, with corresponding consequences for the country and the international financial markets.
In 2011, it was almost time before Barack Obama and his then deputy Biden reached an agreement at the last minute with the Republicans, who also dominated parliament at the time. This spooked the stock market and prompted a rating agency to downgrade America’s credit rating.
This time it could get even tighter because there are hardliners in the Republican faction who want to damage Biden and the Democrats by any means necessary. McCarthy presumably had to assure these people that he would be tough, otherwise he could quickly be out of his job as at least the official spokesman in the plenum – he needs their votes.
A first summit meeting as part of this showdown took place in the Oval Office: the Democratic President received the Republican speaker. The duel had long since started. McCarthy was “a decent man,” Biden said the day before, but he had had to give in to an extremist wing of his party. When asked about a message for his guest, he answered: “Show me your budget and I’ll show you mine.”
Debt has regularly increased under Republican leadership
Because so far, the Republicans have only assured that they will only agree to a further increase in the mountain of debt if the Biden administration cuts state spending. But it is unclear where exactly they want to save. Your patron Donald Trump, who has already opened the 2024 election campaign, urged his colleagues on Capitol Hill to stand firm. However, they should definitely not vote to “cut even a single penny from Medicare or Social Security.”
These are two of the biggest items, but voters would not like an intervention. It could perhaps be about spending on the Pentagon or the Food and Drug Administration. Republicans are divided on the issue of arms deliveries to Ukraine, for example. Most seem to be in favour, though. Left Democrat Elizabeth Warren again recommends repealing Trump’s tax breaks for the wealthy, saying Republicans are “playing the wrong game”.
He doesn’t think anyone in America thinks there can’t be savings somewhere, McCarthy says. They would have five months “to put us together sensibly and to reach an agreement together”. But Biden’s Democrats don’t want to know anything about a negotiated deal, at least not officially. They think the Republicans should approve the increase, just as the government and opposition have always somehow agreed on this matter.
In addition, it is repeatedly reminded that debt has regularly increased under Republican leadership, most recently under Trump. The Treasury Department indicates that Congress has debt limit, the debt limit, has been raised, extended or redefined 78 times since 1960, 49 times under Republican and 29 times under Democratic presidents. On top of that, the pandemic and inflation are costing Washington a fortune.
As expected, the first meeting of the spokesmen did not end the dispute. “The greatest threat to America is our debt,” McCarthy proclaimed afterwards. “We have a lot of income. We just have a spending problem.” But the conversation was better than expected, it will be continued and a basis will be found in the end. The White House said the President made it clear to his visitor that avoiding a catastrophic default is a shared responsibility.