WASHINGTON, D.C. – The clock is ticking for congress and the President to reach an agreement on the debt ceiling before the June first deadline. So far, no agreement has been made but the negotiations continue. The President wants to freeze spending at the levels agreed to in the previous fiscal year but Speaker Kevin McCarthy (R- CA) is adamant that Washington should reduce the amount of spending.
Following a meeting between the President and the Speaker, the President released a statement saying in part that default is off the table and the only way to move forward is in good faith toward a bipartisan agreement. Biden adds while there are areas of disagreement, they will continue to discuss the path forward.
The Treasury Department warns that come June first, the federal government would no longer have enough money to pay all of its bills which would cause a default. The US has never defaulted before but it would cripple the US economy and possibly push borrowing costs higher.
Speaker McCarthy said their hard line is on spending. They’ve been pushing to trim down the staggering 31.5 trillion dollars in debt. The White House wouldn’t say if they are close to an agreement on the debt ceiling but they did say negotiations are still ongoing and productive.
“We should pull back money that’s been wasted, we should help people get jobs by having work requirements and we’ve seen that work time and again,” said Speaker McCarthy. “We should find ways to cap the amount going out there because the democrats have spent so much, even [Senator] Joe Manchin had thought of that one percent cap going forward.”
Congressional members are calling the debt ceiling situation a national security threat just because of the severe economic hardships that would happen if we default, like losing millions of jobs and trigger a recession. Speaker McCarthy said even if an agreement is reached soon, it will still take congress a couple of days to vote on the debt ceiling. The Speaker wants to finalize the agreement before the week is over.