McCarthy, Biden Set for Afternoon Meeting on Debt Ceiling

WASHINGTON — President Joe Biden and House Speaker Kevin McCarthy, R-Calif., are set to meet late Monday afternoon for the latest round of face-to-face negotiations on raising the nation’s debt limit. This comes after each leader’s hand-picked subordinates met in fits and starts over the weekend in a bid to head off a looming and potentially catastrophic default.

McCarthy announced the meeting via Twitter after receiving a call from the president from Air Force One, as Biden made his way home from the Group of 7 summit in Hiroshima, Japan.

Speaking with reporters a short time later, McCarthy said he believed the phone call was “productive,” but hastened to add that there’s still a long way to go if a deal on raising the debt ceiling is to be reached.

The debt ceiling, of course, is a cap on the total amount of money that the federal government is authorized to borrow to fulfill its financial obligations. 

Because the United States historically runs budget deficits, the number involved gets huge in a hurry. The current U.S. debt is roughly $31.4 trillion dollars.

Under the U.S. Constitution, Congress must authorize borrowing, but at the same time, it has long sought to restrict the federal debt.

According to the Congressional Research Service, the debt limit was instituted in the early 20th century so that the Treasury would not need to ask for permission each time it had to issue debt to pay bills.

For instance, the Second Liberty Bond Act of 1917 included an aggregate limit on federal debt as well as limits on specific debt issues. Through the 1920s and 1930s, Congress altered the form of those restrictions to give the U.S. Treasury more flexibility in debt management and to allow modernization of federal financing. 

In 1939, a general limit was placed on federal debt, the research service said.

McCarthy and his Republican allies on Capitol Hill are insisting that the federal budget — particularly on the domestic spending side — be cut dramatically before they will consider raising the debt limit.

“They want to come into the room and think we’re going to spend more money next year than we did this year,” McCarthy said of Democratic lawmakers over the weekend. “That’s not right, and that’s not going to happen.”

In response, White House Press Secretary Karine Jean-Pierre has said the president wants a deal, but feels the Republicans haven’t been serious about coming up with a plan that can pass Congress in a bipartisan manner.

“It is only a Republican leadership beholden to its MAGA wing — not the president or Democratic leadership — who are threatening to put our nation into default for the first time in our history unless extreme partisan demands are met,” she said.

On Sunday, McCarthy was measured in his remarks about his phone call with Biden, saying the president “walked through some of the things that he’s still looking at, he’s hearing from his members; I walked through things I’m looking at.” 

“We’re still apart,” he said, adding later that talks were continuing and the fact that another sit-down with the president is happening on Monday suggests hope for a deal by June 1, the date Treasury Secretary Janet Yellen has suggested the nation could go into default, is still alive.

“Look, we’re 11 days out. We’ve got to be able to solve this problem,” McCarthy said.

Speaking on the sidelines of the G7 summit, Biden told reporters he still believes the nation will avoid default and that the negotiating teams would “get something decent done.”

Adopting a reassuring air, Biden noted that much of what’s been said in public about the talks is little more than political theater, each of the negotiating teams wanting to strike the best bargain for their side.

Biden also for the first time on Sunday said he believes he has the power to challenge the constitutionality of the nation’s borrowing limit.

A clause in the 14th Amendment stipulates that “the validity of the public debt” issued by the U.S. government “shall not be questioned.” 

Some legal experts argue the debt limit is constitutional; others, however, insist the clause requires the government to continue issuing new debt to pay bondholders — effectively voiding any argument over the limit.

But even if he has the power to challenge the constitutionality of the debt limit, Biden said he’s not sure at this point whether the limit could be struck down before the so-called “X-date” for default arrives.

“The question is could it be done and invoked in time,” the president said before departing Hiroshima.

Biden also took issue with congressional Republicans for refusing to consider raising taxes to reduce future budget deficits as part of the negotiations. He said he had proposed a discretionary spending cap that would save $1 trillion over a decade compared with baseline projections.

“It’s time for Republicans to accept there is no budget deal to be made solely on their partisan terms,” he said.

Dan can be reached at [email protected] and at https://twitter.com/DanMcCue