President Joe Biden on Sunday slammed Republican demands in negotiations to resolve the US debt ceiling standoff as “unacceptable” but said a solution can still be found before a disastrous default.
Speaking at a press conference just before leaving to return to Washington from the G7 summit in Hiroshima, Japan, Biden said Republicans’ latest demands for spending cuts as a condition for raising the US government borrowing authority were “frankly unacceptable.”
“It’s time for the other side to move from their extreme positions,” he said.
Biden said he would talk directly with Republican House Speaker Kevin McCarthy during his Air Force One flight on Sunday back to Washington and said “we can reach an agreement.”
However, he cautioned that he could not “guarantee that they wouldn’t force a default by doing something outrageous.”
Biden said that he was looking into an obscure constitutional clause in the 14th Amendment, which states that the validity of public debt “shall not be questioned” — and potentially authorizing the president to circumvent Congress and raise the debt ceiling himself.
“I think we have the authority. The question is could it be done and invoked in time,” he said, noting the likelihood of legal challenges to this and the rapidly approaching debt deadline.
The Treasury Department says that the government could run out of money and default on its $31 trillion debt as early as June 1 if Congress, where Republicans control the House of Representatives, does not authorize more borrowing.
Biden had planned to travel from Japan to Papua New Guinea and Australia but cut short the Asia trip due to the debt talks.
‘Hostage’ accusation
The debt ceiling raise is usually an uncontroversial annual procedure but this year the increasingly hard-right Republican Party has turned the threat of default into a powerful lever to try and force Biden to accept spending cuts. Biden accuses his opponents of putting the US economy at risk for political point scoring.
Discussions were at an impasse over the weekend in Washington, as both sides traded accusations.
“We’re making 0 demands to avoid default. You’re the only ones with a hostage,” tweeted White House spokesperson Andrew Bates, accusing Republicans of seeking to trigger a recession in the world’s leading economy.
White House Press Secretary Karine Jean-Pierre said that McCarthy was being strong-armed by his party’s pro-Donald Trump wing, which is “threatening to put our nation into default for the first time in our history unless extreme partisan demands are met.”
McCarthy, however, tweeted Saturday to say the White House was the one “moving backward.”
“Unfortunately, the socialist wing of the Democrat Party appears to be in control — especially with President Biden out of the country,” he said.
Biden said that McCarthy was likely waiting for him to join in before the talks could be revived.
“My guess is he’s going to want to deal directly with me,” Biden said.
Spending and taxing
More borrowing is required imminently by the US government just to meet expenditures already agreed to in the current budget.
Failure to strike a deal to lift the debt ceiling would leave Washington unable to pay its bills and trigger an array of economic shockwaves worldwide — including, the White House says, a US recession.
With the 2024 election campaign underway and Biden potentially facing Trump again, Republicans have seized the opportunity to paint the Democrats as responsible for the country’s gargantuan debt — which in reality has built up over decades.
Republicans say the debt ceiling can no longer be raised without harsh measures to reduce the deficit. These include slashing social spending and restricting access to Medicaid, the subsidized program providing health care for the poor.
Biden has countered with a plan to reduce some spending but also to raise new revenue by increasing taxes on the richest Americans and corporations which currently enjoy huge tax breaks. Republicans are refusing to accept any tax increase as part of a deal.
“That’s what we continue to have a significant disagreement on, on the revenue side,” Biden said in his press conference.
He cautioned that the 14th Amendment was not a magic bullet, since he could not be sure about his ability to invoke it before the government ran out of money.
“We have not come up with unilateral action that could succeed in a matter of two weeks or three weeks. That’s the issue. So it’s up to lawmakers,” he said.