Biden
President Joe Biden speaks in the East Room of the White House to mayors who are attending the U.S. Conference of Mayors winter meeting in Washington, Friday, Jan 20, 2023, (AP Photo/Susan Walsh)
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Biden to meet with Democratic leaders as debt showdown looms

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By LISA MASCARO and SEUNG MIN KIM

President Joe Biden is hosting the Democratic congressional leaders Tuesday at the White House as they face a new era of divided government in Washington, staring down a debt ceiling crisis, the Russian war in Ukraine and their own party priorities running up against a new House Republican majority eager for confrontation.

Ahead of the afternoon meeting, Senate Majority Leader Chuck Schumer said the House Republicans are risking a potentially devastating debt default that would cascade across the economy hitting American households.

“We're now witnessing the House GOP recklessly flirt with default,” Schumer said.

Schumer said Democrats stand united in working to raise the limit and stop Republicans from imposing draconian budget cuts to federal programs. “If the MAGA GOP stops paying our nation’s bills, Americans pay the price,” he said, referring to those Republicans allied with the Trump-era Make American Great Again movement.

The coming showdown has a familiar precedent — a little more than a decade ago, a new generation of “tea party” House Republicans swept to power, eager to confront the Obama administration to slash federal spending and curb the nation's ballooning debt load. As vice president at the time, Biden was central to those negotiations, but the House Republicans and the White House could never strike a deal, causing a fiscal crisis. This go around, Biden and his Democratic allies in Congress are in no mood to broker deals with a new era of hardline Republicans led by the Freedom Caucus.

House Speaker Kevin McCarthy is eager to push Biden to the negotiating table, hoping to make good on the promises the GOP leader made to holdouts during his campaign to become House speaker to pare federal spending back to fiscal 2022 levels, which would be a sizable 8% budget cut.

The White House has not yet invited McCarthy for a meeting, but says it plans to do so soon.

“We’ve seen this movie before,” said Sen. John Cornyn of Texas, a member of Republican leadership.

In the Senate, Republicans appear more than willing to stand aside, for now, letting McCarthy and the House GOP take the lead in talks with Biden — and wary of embracing the kind of cuts to federal spending the House GOP wants but that have little chance of becoming law.

Senate Republican leader Mitch McConnell said Tuesday, “I think it is entirely reasonable for the new speaker and his team to put spending reduction on the table.”

McConnell said of McCarthy's yet-unscheduled-session with Biden: “I wish him well and in talking to the president. That’s where a solution lies.”

The afternoon meeting between Biden and the Democratic leaders comes as the White House is throwing open its doors for a new lawmaker reception later Tuesday evening, though many House Republicans say they will not attend because they cannot abide by the administration’s requirement for visitors to be vaccinated against the coronavirus.

On the debt, the Treasury Depart notified Congress last week that the nation has reached its borrowing capacity, $31 trillion, and will need to increase the limit to be able to continue paying off its already accrued bills. Treasury Secretary Janet Yellen has launched extraordinary measures which are routinely used at times like this, but that will run out in June.

Debt has been climbing for years, the last time the federal budget didn't carry red-ink deficits was during the Clinton years. Instead, the George W. Bush administration saw the debt skyrocket thanks to tax cuts and the wars overseas. Debt grew again in the Barack Obama era especially in the aftermath of the Great Recession.

The 2011 negotiations centered around a $1-for-$1 tradeoff of spending cuts for new debt, but the sides could never agree to the size and scope of reductions in federal health care, military, infrastructure and other accounts. So far, the Biden administration has refused to engage with House Republicans.

Sen. Ron Wyden, D-Ore., the chairman of the Finance Committee, said his party learned its lessons when negotiating with Republicans on the debt ceiling in 2011.

“We know what happened. It almost threw the economy into the ditch," Wyden said. "That’s the lesson.”

One idea being discussed has been for Congress to establish some sort of debt panel, much like the failed “Super Committee” that tried in the aftermath of the 2011 talks to come up with agreed upon ways to cut federal spending.

“The bottom line is, can we find a pathway forward before all the theatrics start?" said Sen. Joe Manchin, the conservative West Virginia Democrat who is known for straddling the party lines. "We know we’re going to pass it. It’s just a matter of how much pain you want to put people through.”

Associated Press writers Josh Boak, Kevin Freking and Mary Clare Jalonick contributed to this report.

© Copyright 2023 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

©2023 GPlusMedia Inc.


12 Comments

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If the MAGA GOP stops paying our nation’s bills, Americans pay the price.

Exactly. Pay what you owe. I've never heard of anyone "cutting down in spending" by intentionally defaulting on bills you've already racked up.

If I'm wrong, please chime in. I'd like to hear GOPers say they'd do this personally so they have no problems doing this to our country.

I figure we're just going to get the same emotional outbursts from low income conservatives who don't have anything to lose.

2 ( +2 / -0 )

I have a crazy idea. How about spending 2% less than the income and paying down the debt year by year?

Would be great to have a balanced budget mandated, except in times of formally declared wars and if there is any national debt, then the allowed expenditures must be at least 5% less than the tax income with that 5% going to pay down the debt.

Crazy, right?

0 ( +1 / -1 )

Would be great to have a balanced budget mandated, except in times of formally declared wars

Meditate on the equation of national income: GDP = C + I + G + ( EX - IM ).

In words that is saying that GDP equals the sum of consumption, investment, government expenditure and net exports. In a recession / depression GPD is falling. That usually means consumption and investment are also falling. To stimulate GDP growth during a recession you want to increase G and that generally means deficit spending. The increase in GDP generally exceeds the increase in G because the money spent by the government on wages and material gets spent again by the recipients. That stimulates economic growth.

However after solid GDP growth returns and the economy is stable, the resulting debt needs to be paid down. Wars are not the only time to deficit spend and might not be a good time to do so, but when a nation is faced with a recession, cutting G, government spending, accelerates the decline in GDP and makes the recession / depression even worse.

2 ( +2 / -0 )

The US tax burden is among the lowest in the developed world measured in terms of government revenues from all sources as a proportion of GDP. The US could raise taxes to cover most of its deficit without hurting the economy if the tax increases are done smartly. In 1999 and again in 2000 the US ran miniscule but positive budget surpluses, and was expected to do so in the future until the Bush tax cuts put the nation back into a deficit.

Here is the real story. The Republicans love a budget deficit because they love to cry broke and use that as an excuse to cut Social Security, Medicare, and any other program that might help the poor and disabled. They played that game in California for years. Now the Repubes hold no statewide offices and have a superminority in both houses of the State Legislature. The state has run budget surpluses, often very large ones, every year since 2008 while advancing it's GDP to number 4 in the world. There is money for schools and other programs that was always cut when there were enough Repubes in the Legislature to block budgets that were not in deficit. The US is more than wealthy enough to afford the programs it has without running deficits and without doing any harm to its economy.

2 ( +2 / -0 )

Only a lune or a moron would threaten the full faith and credit of the United States by threatening to default.

Oh, look who it is?

That does make more sense.....

1 ( +1 / -0 )

Remember how the GQP threatened to vote against raising the debt limit when Trump was president because we were on the path to economic ruin?

No?

Me neither.

I fact, the only way to go in an economy already operating at full-employment was to institute tax cuts that added 7.2 TRILLION to the debt and benefitted the richest 1%.

Because that is how fiscal conservatives roll (when it is their boi in the WH).

1 ( +1 / -0 )

And I know that this will go over the head of every "self-made" (cough cough) entreprenuer or day-trader out there but the debt limit is about PAST spending that we already owe.

Defaulting on it will not result in less future spending. In fact, it will result in MORE spending in the form of increased intrest payments on soveriegn debt as a result of lost trust from the market.

Funny how that works, isn't it?

Strange how every educuated professional says the same thing. Every. Single. One.

1 ( +1 / -0 )

Only a lune or a moron would threaten the full faith and credit of the United States by threatening to default. 

Oh, look who it is? 

That does make more sense.....

I'm sorry, but when did the left care about the US credit or even the National Debt?

Remember how the GQP threatened to vote against raising the debt limit when Trump was president because we were on the path to economic ruin?

No?

Me neither. 

I agree different times and we had RINO''s back then, not to mention they were in the minority, different times, and a different year.

I fact, the only way to go in an economy already operating at full-employment was to institute tax cuts that added 7.2 TRILLION to the debt and benefitted the richest 1%. 

Ahh, you mean, the 7.2 million jobs that millions had to put on hold because we went on lockdown during the pandemic? So you are saying that Biden should get credit for giving jobs back to people that already had jobs and left for a few years and came back? Wow, just wow!

Because that is how fiscal conservatives roll (when it is their boi in the WH).

In the past, yeah.

-2 ( +0 / -2 )

The debt limit is an artifact of WWI when the Treasury had to ask Congress each time it incurred new debt to pay for the war. Congress decided to enact a debt limit so the Treasury didn't have to go to Congress for each new debt. Now it has become a political hot potato that is unnecessary. Get rid of the debt limit altogether. Fiscally it changes nothing but it repealing the debt limit gets rid of this opportunity for nail biting political theater.

3 ( +3 / -0 )

As part of the MAGA takeover of the Repub Party, the old value of "personal responsibility" has been jettisoned much like "fiscal responsibility" and "law and order"...

Now, like their leader, the value is "welch on your debts"....

Repubs gave their Top 1% backers a $1.9 TRILLION tax cut in 2018 - all UNFUNDED - on the nation's credit card....

Now they want to welch on that debt...

We can add "welchers" to kooks, liars, and seditionists when describing today's Repub Party...

2 ( +2 / -0 )

And I know that this will go over the head of every "self-made" (cough cough) entreprenuer or day-trader out there but the debt limit is about PAST spending that we already owe.

That is the truth. Congress has already appropriated the funds and thus has already incurred the debts. There is probably a legal argument to be made that a debt limit that does not allow the Executive Branch to obligate the money appropriated by Congress in their annual appropriations acts or pay interest in previously incurred debt, funds that are also appropriated by Congress is illegal. The way the laws are written the Executive Branch is obligated to expend the money Congress appropriates on the things Congress appropriated the funs for. The law clearly states the Executive Branch cannot refuse to spend money Congress appropriates. But then there is a debt limit that effectively prevents the Executive Branch from expending appropriated money including interest payments on previously incurred debt. I wonder if there is a court willing to hear such a dispute between two branches of the Federal Government.

2 ( +2 / -0 )

Economic limits sound like a good idea but at the end of the day they just tie your hands and limits your flexibility. That can really come back to bite you when you are forced into an unexpected situation.

2 ( +2 / -0 )

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