Biden says he is confident America will not pay off its debts
WASHINGTON — President Biden, just before leaving for a diplomatic trip to Asia on Wednesday, said he was confident “America will not default” as congressional leaders from both parties showed some signs of optimism about eventually reaching a deal to increase the country’s borrowings. limit.
“Every leader in the room understands the consequences if we don’t pay our bills,” Biden said Wednesday at the White House before leaving for Hiroshima, Japan, to attend the Group of 7 meeting there. “And it would be catastrophic for the American economy and the American people.”
Mr Biden described his face-to-face meeting with congressional negotiators the day before as productive, “civil and respectful” and said both Democrats and Republicans agreed that the United States cannot default.
But his decision to get the final word on the negotiations indicated that even as he leaves for a summit on the global economy, the White House is focused on averting an economic crisis at home.
Biden decided to cut short the trip to Asia to be back for what he called “final negotiations” over the ceiling, the legal limit on how much the government can borrow to fund its obligations. He is scheduled to return to Washington on Sunday, skipping scheduled visits to Papua New Guinea and Australia.
Biden echoed the optimism of both Democratic and Republican leaders after Tuesday’s rally.
He has assigned his senior adviser, Steve Ricchetti, and Shalanda Young, the director of the Office of Management and Budget, to speak with a team of negotiators representing congressional Republicans. Speaker Kevin McCarthy had also praised the move on Tuesday as a sign of progress.
“We have narrowed the group down to meet and work out our differences,” Mr Biden said, adding that the negotiating teams met on Tuesday evening and will meet again on Wednesday.
Time is running out for the two sides to come to a consensus.
The government hit the $31.4 trillion debt limit on Jan. 19, and the Treasury Department has used a series of accounting maneuvers to keep paying its bills. Treasury Secretary Janet L. Yellen reiterated that the United States could run out of money to pay its bills before June 1 if Congress does not raise or suspend the debt limit, potentially triggering a recession or job cuts.
Republicans have said they want to cut federal spending before lifting the ceiling, while Biden has said negotiating the cuts should not be a requirement for raising the debt limit. Still, the Democrats seem increasingly open to compromise with the Republicans. Both New York Democratic leaders, Sen. Chuck Schumer, the majority leader, and Representative Hakeem Jeffries, the minority leader, told reporters that passing a bipartisan bill in both chambers was the only way forward.
Mr. Biden signaled he was open to a possible agreement on tougher job requirements for federal aid programs over the weekend when he reminded the press that as a senator he had voted for such measures — with the exception of Medicaid.
When asked on Wednesday if he was still considering the job requirements, Mr Biden said it is possible, “but nothing of any significance”.
“I’m not going to accept work requirements that will affect people’s medical health needs,” Biden said.
Mr Biden added that he did not believe shortening his overseas trip would help China gain influence in the region. The government has sought to strengthen partnerships in the region to counter China’s economic presence. But ongoing talks forced Mr Biden to reduce stops in Papua New Guinea and Australia.
Biden said he called Australia’s Prime Minister Anthony Albanese on Tuesday to inform him of his decision to cancel part of his trip. While officials in the administration were still deciding whether to shorten the trip, they also discussed sending a replacement, including Vice President Kamala Harris or Antony J. Blinken, the secretary of state, according to an official familiar with the case.
As of Wednesday morning, there were no plans to send a replacement.