President Biden and House Speaker Kevin McCarthy were set Wednesday to hold a high-stakes face-to-face meeting at the White House as the two parties sparred over the debt ceiling and spending at the dawn of a new divided Congress.
With Democrats and Republicans locked in a standoff over raising the debt ceiling, the two leaders were hoping to at least open lines of communication even as they start what is likely to be a months-long game of political and economic chicken.
Biden has said he won’t haggle with the GOP over raising the nation’s legal debt ceiling. He warns against throwing the economy into chaos by even allowing Republicans to discuss the matter.
McCarthy, who barely survived a bruising internal Republican feud to win the speaker’s gavel, has brushed off those threats as “political games.”
“I’m coming to negotiate for the American people,” McCarthy declared as he headed to the meeting. “I’ve got a big plan.”
McCarthy hasn’t actually said what he wants from Biden in exchange for raising the debt ceiling.
He’s made vague promises to his far right-wing Republican lawmakers to win punishing spending cuts especially in Democratic-friendly domestic programs.
But most GOP lawmakers don’t want to even talk about cutting popular programs like Medicare or Social Security, or raising taxes.
“Show us your plan. Where is your plan, Republicans?” Senate Majority Leader Chuck Schumer, (D-N.Y.) sniped at McCarthy on Wednesday.
His GOP counterpart Sen. Mitch McConnell countered by claiming a mandate from voters to ease spending.
“The American people changed control of the House because the voters wanted to constrain Democrats’ runaway, reckless, party-line spending,” McConnell said.
The nation is heading toward a fiscal showdown over raising the debt ceiling, a once-routine vote that Republicans have sought to turn into a political cudgel against Biden as the 2024 presidential election nears.
Newly empowered House Republicans want to force Biden and Senate Democrats into budget cuts as part of a deal to raise the limit even though they made no such demands when former President Donald Trump was spending freely.
Fiscal mandarins like Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell have sided with Biden, warning Republicans that it’s their duty to raise the debt ceiling and negotiate spending cuts separately.
It’s unknown what might actually happen if the Republicans were to make good on their threat to refuse to raise the debt ceiling. A U.S. default on its obligations could throw the world into a deep financial crisis and even shake the dollar’s standing as the world’s most potent currency.