Republican House Speaker Kevin McCarthy rejected the possibility of a short-term debt-limit extension hours ahead of a meeting on the default crisis with President Joe Biden, intensifying confrontation with Democrats.
“Why continue to kick the can down the road?” McCarthy told reporters Tuesday at the Capitol, when asked about extending the ceiling until Sept. 30. “Let’s solve it now.”
A White House spokesman countered that a short-term extension is not the administration’s plan and stressed that default it not negotiable.
Treasury Secretary Janet Yellen has warned the nation could exhaust its ability to meet all payment obligations by June 1 without action, leaving little time for a broad bipartisan deal.
US stocks slumped Tuesday as the debt ceiling impasse dragged on investor sentiment, with the benchmark S&P 500 down 0.4% at mid-day.
The speaker said he is focused on getting Biden to agree to budget negotiations and has no interest in reducing the pressure he’s applying on the president.
“It’s the same message I gave him 97 days ago. Why don’t we sit down and work this all out? He said he would meet with us and he ignored us for 97 days,” McCarthy said.
Biden and McCarthy last met on Feb. 1 and have since been in a war of words as the market begins to show signs of strain.
The two leaders will sit down along with Senate Majority Leader Chuck Schumer, Senate Minority Leader Mitch McConnell and House Minority Leader Hakeem Jeffries at 4pm at the White House.
McCarthy demands budget cuts in exchange for raising the debt ceiling. Biden has refused to link budget and debt talks.
If both sides continue to reiterate their stances after the meeting, it will be a sign to markets that the risks of a US credit downgrade or payment default are rising. Any comments indicating progress in coming to a budget agreement would be a sign that these risks are diminishing.
The House last month passed a bill that would raise the debt ceiling by $1.5 trillion in exchange for $4.8 trillion in budget deficit cuts over ten years. It contains a litany of conservative priorities, including canceling green energy subsidies and tax enforcement spending from Biden’s signature legislation enacted last year. McCarthy has called the House bill an opening offer that he is willing to use to strike a deal with Biden.
The White House has said it will only accept a “clean” no-strings-attached debt ceiling increase, although Biden is open to separate talks on the budget levels for fiscal 2024. But the administration opposes the $130 billion cut that McCarthy has proposed for next year, saying it would devastate a range of domestic programs from housing to cancer research.
Biden plans to make his case against the GOP proposal in the district of swing-district New York Republican Mike Lawler later this week. McCarthy blasted the president for doing that in comments to reporters.
“They play politics,” he said. “They ought to spend that time here and solve it.”
--With assistance from Justin Sink.
(Updates with new detail starting in the third paragraph)