America will not default on its financial obligations and an agreement on spending priorities will be reached in the coming days, President Joe Biden said before departing on a trip to strengthen U.S. relationships with allies.
“America is not a deadbeat nation. We pay our bills. The nation has never defaulted on its debt, and it never will. And we’re going to continue these discussions with congressional leaders in the coming days until we reach an agreement,” the president told reporters at the White House on May 17.
The remarks appeared intended to offer assurance that the monthslong standoff between the president and House Speaker Kevin McCarthy (R-Calif.) over raising the nation’s $31.4 trillion debt ceiling would soon be resolved despite his absence from the country for four days.
Biden will attend the G7 Summit in Hiroshima, Japan, along with leaders from France, the United Kingdom, Germany, Japan, Italy, and Canada. The trip will include meetings with the leaders of India and Australia, though side trips to Australia and Papua New Guinea were postponed due to the debt negotiations.
The president met with McCarthy on May 16 to discuss the debt ceiling, spending caps, and other provisions proposed by Republicans. Vice President Kamala Harris, Senate Majority Leader Chuck Schumer (D-N.Y.), Senate Minority Leader Mitch McConnell (R-Ky.), and House Minority Leader Hakeem Jeffries (D-N.Y.) also attended. It was the second such meeting in eight days.
“We had a productive meeting yesterday and—with all four leaders of the Congress. It was civil and respectful. And everyone came to the meeting, I think, in good faith. I’m confident that we’ll get the agreement on the budget, that America will not default,” Biden said.
Crux of the Problem
The president and the speaker had been in a standoff over raising the nation’s $31.4 trillion debt ceiling since January.
The country usually operates on a deficit budget, so borrowing is needed each year to meet the spending obligations legislated by Congress. The Treasury will be unable to stay under the limit after about June 1, according to Secretary Janet Yellen, meaning that the government will no longer be able to meet its financial obligations if the debt limit were not raised.
Biden has insisted the debt ceiling must be raised without pre-conditions to preserve the full faith and credit of the United States, a position he still tries to maintain despite engaging in talks about both subjects.
“To be clear, this negotiation is about the outlines of what the budget will look like, not about whether or not we’re going to, in fact, pay our debts,” Biden said.
Republicans have consistently insisted that the two items must be linked. McCarthy has said that there will be no “clean debt limit,” meaning an increase without some agreement on spending limitations.
House Republicans passed the Limit, Save, Grow Act in April that would raise the debt ceiling by $1.5 trillion, which experts say would carry the government through March 2024.
The bill would also lower discretionary spending to the 2022 level, capping spending growth at 1 percent annually for a decade, strengthen work requirements for some recipients of federal assistance, claw back unspent COVID-19 relief funds from the states, and loosen regulations on oil and gas drilling.
A number of Senate Republicans publicly supported the Limit, Save, Grow Act at a bicameral news conference at the U.S. Capitol minutes after the president finished speaking.
“We won’t support bringing debate to a close on any debt ceiling increase that does not contain substantive spending and budgetary reforms,” Sen. Mike Lee (R-Utah) said, flanked by about 40 GOP members of Congress.
Meetings to Proceed
Lee and others also criticized the president’s decision to attend the G7 Summit while debt ceiling negotiations are ongoing, despite concern among members of both parties about the growing influence of the Chinese Communist Party in East Asia.
“Mr. President, cancel your trip to Japan. Stay at the [negotiating] table,” Rep. Dustin Johnson (R-S.D.) said.
“I think we saw the helicopters going across here. I said, ‘I think he’s leaving now to go to Japan. I’m like, stop, stop!’” said Sen. Shelley Moore Capito (R-W.Va.).
Biden defended his decision to attend the summit based on its strategic importance and his belief that negotiations could proceed in his absence.
“America’s role in the world is vital, especially right now as we work together with other countries to support Ukraine and take on the challenges that demand international cooperation, from tackling the climate crisis to strengthening the—the global economy,” Biden said.
On May 16, the president appointed Steve Ricchetti, counselor to the president, and Shalanda Young, director of the Office of Management and Budget, to take the lead in negotiations on his behalf, a move McCarthy said made him “more optimistic” that a deal could be reached.
The two have already begun meetings, with Rep. Garret Graves (R-La.) tapped as lead negotiator by McCarthy, and members of McCarthy’s staff, the president said.
“I’ll be in constant contact with my team while I’m at the G7. And I’ll be in close touch with Speaker McCarthy and other leaders as well,” Biden said.
The speaker said he believes negotiations can proceed despite the president not being in the room. “I think if the administration can make decisions with the president not there, we’ll be OK,” McCarthy said.
Biden is scheduled to return from Japan on May 21. He has said he will hold another news conference on the debt ceiling then.
From The Epoch Times