U.S. President Joe Biden said Sunday that opposition Republicans in the House of Representatives must move away from their “extreme position” on government spending in order to reach a deal with Democrats to raise the country’s borrowing limit before it runs out of cash to pay its bills.
The government could come up short to meet its financial obligations as soon as June 1, but the Democratic president said at a news conference in Hiroshima, Japan, that there will be no agreement to avert a catastrophic default affecting the U.S. and global economies only on Republican terms.
“It’s time for Republicans to accept that there is no bipartisan deal to be made solely, solely, on their partisan terms,” Biden said at the end of a Group of Seven summit of the leaders of the world’s wealthiest democracies.
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Biden said he had done his part by offering ways to raise the country’s $31.4 trillion borrowing limit so the U.S. government can keep paying its bills, such as interest on government bonds, stipends to U.S. pensioners and payments to health care providers and salaries for government employees and contractors. He said, “It’s time for the other side to move from their extreme position.”
En route to Washington, Biden talked with Republican House Speaker Kevin McCarthy, agreeing to have their negotiators get together again later Sunday and that they would meet in person Monday. While Biden was in Japan, his negotiators met with key Republicans, but the talks produced no agreement, with both sides digging in for their viewpoints on government spending for the fiscal year starting in October.
“My discussion with the president, I think, was productive,” McCarthy told reporters at the Capitol. “I think we can solve some of these problems if he understands what we’re looking at.”
Treasury Secretary Janet Yellen told NBC’s “Meet the Press” show that the date when the government runs out of cash to pay its current bills remains uncertain, but that an expected June 15 infusion of tax payments may not come soon enough to avert a default.
“There’s always uncertainty about tax receipts and spending,” Yellen said. “And so, it’s hard to be absolutely certain about this, but my assessment is that the odds of reaching June 15th, while being able to pay all of our bills, is quite low.”
She said decisions have not been made on which bills would go unpaid if the government defaults.
“I would say we’re focused on raising the debt ceiling and there will be hard choices if that doesn’t occur,” Yellen said. “There can be no acceptable outcomes if the debt ceiling isn’t raised, regardless of what decisions we make.”
Biden said he still believes a compromise remains within reach to avert what would be the first-ever U.S. government default, roiling world stock markets, diminishing the U.S. credit rating and forcing many U.S. businesses to lay off thousands of workers.
“I’m hoping that Speaker McCarthy is just waiting to negotiate with me when I get home. … I’m waiting to find out,” Biden said.
Republicans in the House have called for sharp government spending cuts, rejecting the alternatives proposed by the White House, which has called for closing tax loopholes and more limited spending reductions. In the past, previous presidents and congressional leaders have reached deals to raise the country’s debt limit 78 times in give-and-take negotiations in which neither side got everything on its wish list.
This time, Republicans want increased work requirements for able-bodied poor people receiving government assistance, but Democrats say that under such a proposal several hundred thousand people could lose the benefits they now receive.
Republicans also are seeking cuts in funding for the country’s tax-collection agency and asking the White House to accept provisions from their proposed immigration overhaul to stem the tide of migrants trying to enter the U.S. at the Mexican border.
The White House has countered by keeping defense and nondefense spending flat during the next budget year starting October 1, which would save $90 billion in 2024 and $1 trillion over 10 years.
“I think that we can reach an agreement,” Biden said.
But he acknowledged, “I can’t guarantee that [Republicans] wouldn’t force a default by doing something outrageous.”