Tuesday, June 6, 2023

Ten days after going into default, the United States can’t solve its debt problem

Ten days after going into default, the United States can’t solve its debt problem

As June 1 approaches, the date on which the US government will be unable to pay its bills, the debate over whether to extend the debt is making no headway and tensions between political parties are rising.

House Speaker Kevin McCarthy told reporters that talks to raise the United States debt ceiling resumed this Friday night, despite the fact that they came to an abrupt halt during the week. It came after Republican lawmakers pulled out of talks citing “unreasonable” requests from the Biden administration.

“We’ll be back in the room tonight,” McCarthy said in an interview with Fox Business, just hours after the rep. Garrett Graves said, “It’s time to ‘stop’, because it’s just not productive.”

According to the Treasury Secretary, the United States will default on June 1.

Graves was hired by Kevin McCarthy earlier this week to manage negotiations with the White House on behalf of the Republican Party. McCarthy confirmed that the talks had stalled again on Friday, telling reporters: “We have no movement yet.” On the other hand, he blamed the impasse on the White House’s refusal to cut federal spending, one of the Republican demands in exchange for raising the debt ceiling to $31.4 trillion.

The remarks reversed McCarthy’s expressions of optimism just a day earlier, when he said he “saw a path we can move forward”, although he reiterated that the two sides “have not yet reached an agreement”.

McCarthy also said Thursday that he expected to reach an agreement later this week and pass a new debt ceiling bill in the House next week ahead of the June 1 deadline set by Treasury Secretary Janet Yellen, when federal The government may run out of cash and become incapacitated. to pay your bills.

Former President Donald Trump weighed in almost immediately after Graves’ statement, urging Republicans not to make a deal “unless they get everything they want,” he wrote on Truth Social, “Don’t walk away! !!”

Key background

After a months-long standoff, McCarthy and Biden began meeting last week to discuss a deal to raise the federal debt ceiling and on Tuesday appointed negotiating teams to lead the talks. The White House deployed Biden adviser Steve Ricchetti and Office of Management and Budget director Shalanda Young, a small step forward in the discussions.

Republicans are seeking to cut federal spending and roll back Biden’s key policy priorities, while the White House is pushing a debt-limit bill with no conditions attached. Biden has expressed his openness to at least one provision: raising the age at which people must work to receive social benefits, a sentiment that has raised alarm bells among progressive lawmakers.

Tangent line

The impasse came when conservatives and progressives in the House refused to budge from their positions, leaving McCarthy in a difficult position where he fell short of the 218 votes needed to pass legislation in the House.

The House Freedom Caucus, made up of about 50 right-wing members of Congress, urged McCarthy and Graves on Thursday to end negotiations and said it would not accept any debt ceiling bill other than the one passed by the House last month. And it includes a string of spending cuts and shocks in Biden policy.

However, legislation is imprecise in the Democratic-controlled Senate and Biden has threatened to veto it, meaning McCarthy would need some Democrats to vote for the new debt-limit bill. Rep. Alexandria Ocasio-Cortez highlighted McCarthy’s math problem, telling POLITICO Friday that several members of the roughly 100-member Progressive Caucus on the left have also said they would not accept legislation that includes spending cuts.

Nation World News Desk
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