Washington (AFP) - President Joe Biden and the new Republican speaker of the House of Representatives, Kevin McCarthy, were deeply divided as they faced off Wednesday at the White House over the US debt limit – with stability of the world’s biggest economy at stake.
Republicans are threatening to block the usually rubber-stamp approval for raising the nation's credit limit if Democrats don't first agree to steep future budget cuts.
The White House, meanwhile, accuses the Republicans of taking the economy "hostage" in order to posture as fiscally responsible.
Fail to raise the debt ceiling by around June, the Treasury says, and the United States will be forced into default on its $31.4 trillion debt -- a historic first that would leave the government unable to pay bills, undermine the US economy's reputation, and likely panic investors.
McCarthy told Punchbowl News ahead of the White House meeting, which began just after 3:00 pm, that he would ask Biden: "Do you want to negotiate or do you want to play politics?"
Biden, though, doesn't even want to hear the word negotiation when it comes to the debt ceiling."The president firmly believes there should be no negotiation over this," as Biden's national security spokesman John Kirby said Tuesday.
There have been other showdowns over the years when Republicans balked at allowing US debt to spiral ever higher.But on most occasions the dispute was quickly smoothed over, Congress extended the ceiling and the economy kept going without a hiccup.
This time, the political heat makes things far riskier.
Two years through his first term, Biden is widely expected to be on the cusp of announcing his bid for a second term in the 2024 election.And Republicans, who have just taken over control of the House, are eager to show their muscle.
Even if McCarthy is minded to show flexibility, his power in Congress depends almost entirely on the desires of a far-right group of Republicans who are more likely to play chicken, regardless of the global financial consequences.
Budget brass tacks
The White House says it won't allow the current debt ceiling to be part of any negotiation on future government spending because that $31.4 trillion is money already agreed to by Congress.In other words, refusal to raise the debt ceiling would be like refusing to pay an already existing credit card bill.
There could be room for negotiating on changes to future budgets.
McCarthy said Wednesday he planned to challenge Biden over what he referred to as "reckless spending."
But when it gets down to brass tacks, it's hard for either party to say where they can find significant reductions -- unless they go into the usually politically untouchable Social Security, Medicare, Medicaid or other government subsidized healthcare.
Biden signalled he wanted to call McCarthy's bluff by insisting that the Republicans lay out where exactly they'd make cuts.His bet is that the internal divisions in the party will burst into the open as more right-wing members demand cuts to popular spending programs.
"What are House Republicans hiding?" deputy press secretary Andrew Bates said.
In a memo Tuesday, Brian Deese, the director of the National Economic Council, and Shalanda Young, director of the Office of Management and Budget, challenged McCarthy to publish a draft budget.The White House will issue its own on March 9, they said.
McCarthy insisted ahead of the meeting that Biden will bow to pressure.
"If you think you can beat me up, I’m going to be reasonable," he told Punchbowl."But we’re eventually going to have to dance together.So when do you want to play the music, now or later?"
In comments to supporters Tuesday, Biden described McCarthy as a "decent man" who had become beholden to the far right, after an embarrassingly prolonged fight for enough Republican votes to win the House speakership.
"He had to make commitments that are just absolutely off the wall for a speaker of the House to make in terms of being able to become the leader," Biden said.
