WASHINGTON (Reuters) – U.S. lawmakers responded to news that the federal government could be unable to pay its bills as soon as June 1 by digging in on partisan positions, even as Democratic President Joe Biden agreed to meet with lawmakers on the debt ceiling next week.
Democratic Senate Majority Leader Chuck Schumer on Monday began to clear the way for a vote for a bill that would suspend the government’s $31.4 trillion debt limit for two years without conditions.
Republicans in the Senate and House have said repeatedly that they would not vote for such a measure, instead lining up behind a bill passed by the Republican-controlled House of Representatives last week that would raise the debt limit by $1.5 trillion or until March 31, whichever comes first, with $4.5 trillion in spending cuts over 10 years.
Biden and Republican House Speaker Kevin McCarthy have not met since February, with the White House insisting that it would not negotiate on raising the debt ceiling, a move needed to cover the costs of spending and tax cuts previously approved by Congress.
U.S. Treasury Secretary Janet Yellen said in a letter to Congress that the agency may be unable to meet all of its debt obligations as soon as June 1 if the debt ceiling is not raised, putting new urgency on talks in Congress.
The potential June 1 deadline was earlier than Treasury’s prior June 5 forecast, though it said it was possible that the actual “X-date” would not come until weeks later than June 1.
“It’s about time. I’m glad Biden is finally doing his job,” Republican Senator Rick Scott said on Twitter, after the White House said Biden would meet with the top two Republicans and Democrats on May 9.
Democrats urged prompt action to raise the limit, necessary to cover the costs of spending and tax cuts previously agreed to by Congress.
“This is nothing to fool around with. The money has been spent. We do not want to default. Let’s get the debt ceiling taken care of, but let’s talk about how we can reduce the deficit and common sense ways,” Democratic Senator Jon Tester told reporters. “If we don’t get the debt ceiling, then we go into a depression.”
PRIOR RATING CUT
Congress’ last long standoff, in 2011 when Democrat Barack Obama was president and Republicans controlled the House, led to a historic downgrade of the nation’s credit rating, which hammered markets and raised borrowing costs.
The May 9 date for Biden to meet with McCarthy, Schumer, top Senate Republican Mitch McConnell and top House Democrat Hakeem Jeffries is also the next time both chambers of Congress are scheduled to be in session, after a week-long House recess. In all, Congress is scheduled to convene for no more than a dozen days before the June 1 deadline.
Some lawmakers said they wished the meeting were sooner.
“I’m happy they’re going to sit down and talk. Why not tomorrow and over the weekend?” Republican Senator Mitt Romney said. “I’m not going to try and scare anybody. But I’ll tell you that as soon as people start realizing what we’re talking about here, I think there are going be a lot of very upset people.”
McConnell told reporters that he had had a “good conversation” with Biden on Monday, but offered few other details.
Democrats said they could not accept the bill House Republicans passed last week.
“Republicans’ failure to agree to cleanly raise the debt ceiling has brought the United States to the brink of economic catastrophe,” said Democratic Senator Sheldon Whitehouse, chair of the Senate Budget Committee. “Hostage-taking is not the way this country governs. We must change course, cleanly raise the debt ceiling, and avert widespread economic pain and instability while we still can.”
No. 2 Senate Republican John Thune told reporters that word from the Treasury Department that the “X-date” beyond which the government will no longer be able to meet all its obligations could arrive by June 1 was a wake-up call.
“It reinforces the need for the president to get up here or to get McCarthy down there to meet with him, one way or the other. I mean, time is a-wasting.”
Source: Economy - investing.com
