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Biden: Debt meeting ‘productive,’ default ‘not an option’

ASSOCIATED PRESS
                                Senate Minority Leader Mitch McConnell of Ky., Speaker of the House Kevin McCarthy of Calif., and Senate Majority Leader Sen. Chuck Schumer of N.Y., listen as President Joe Biden speaks before a meeting to discuss the debt limit in the Oval Office of the White House, today, in Washington.
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ASSOCIATED PRESS

Senate Minority Leader Mitch McConnell of Ky., Speaker of the House Kevin McCarthy of Calif., and Senate Majority Leader Sen. Chuck Schumer of N.Y., listen as President Joe Biden speaks before a meeting to discuss the debt limit in the Oval Office of the White House, today, in Washington.

ASSOCIATED PRESS
                                President Joe Biden talks with House Speaker Kevin McCarthy of Calif., on the House steps as they leave after attending an annual St. Patrick’s Day luncheon gathering at the Capitol in Washington, March 17. Biden and congressional leaders are holding their first in-person meeting today to try to avert an unprecedented U.S. government default.
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ASSOCIATED PRESS

President Joe Biden talks with House Speaker Kevin McCarthy of Calif., on the House steps as they leave after attending an annual St. Patrick’s Day luncheon gathering at the Capitol in Washington, March 17. Biden and congressional leaders are holding their first in-person meeting today to try to avert an unprecedented U.S. government default.

ASSOCIATED PRESS
                                Senate Minority Leader Mitch McConnell of Ky., Speaker of the House Kevin McCarthy of Calif., and Senate Majority Leader Sen. Chuck Schumer of N.Y., listen as President Joe Biden speaks before a meeting to discuss the debt limit in the Oval Office of the White House, today, in Washington.
ASSOCIATED PRESS
                                President Joe Biden talks with House Speaker Kevin McCarthy of Calif., on the House steps as they leave after attending an annual St. Patrick’s Day luncheon gathering at the Capitol in Washington, March 17. Biden and congressional leaders are holding their first in-person meeting today to try to avert an unprecedented U.S. government default.

WASHINGTON >> President Joe Biden and congressional leaders confronted each other on the debt limit impasse today, ending their meeting with no breakthrough but agreeing to meet again this week to try to avert the looming risk of an unprecedented government default.

Speaking at the White House, Biden described the talks as “productive” even though House Speaker Kevin McCarthy said after the high-stakes Oval Office meeting that he “didn’t see any new movement” toward resolving the stalemate.

House Democratic leader Hakeem Jeffries said lawmakers and their staffs were to continue discussions as soon as this evening on the annual federal budget at Biden’s encouragement. Biden and the congressional leaders are to meet again on Friday.

After the hour-long discussion in the Oval Office, Biden said he was “absolutely certain” that the country could avert a default, declaring that failure to meet America’s obligations “is not an option.”

Republicans came to the White House hoping to negotiate sweeping cuts to federal spending in exchange for allowing new borrowing to avoid default. Biden, on the other hand, reinforced his opposition to allowing the country’s full faith and credit to be held “hostage” to negotiations — while affirming his willingness to hold talks on the budget only after default is no longer a threat.

“I told congressional leaders that I’m prepared to begin a separate discussion about my budget, spending priorities, but not under the threat of default,” Biden said.

Outside the White House, McCarthy said, “I asked the president this simple question, Does he not believe there’s any place we could find savings.”

As the president welcomed McCarthy, Jeffries, Senate Majority Leader Chuck Schumer and Minority Leader Mitch McConnell, he had quipped to reporters, “We’re going to get started, solve all the world’s problems.”

Biden described the meeting’s tone as “very measured and low key,” adding, “occasionally there would be a little bit of an assertion that maybe was a little over the top from the speaker.” Still, he added, “I trust Kevin will try to do what he says.”

There seemed to be at least a bit of daylight between McConnell, who has let his House counterpart take the lead in negotiations and backed him up ahead of the White House meeting, and McCarthy.

The Senate leader categorically said, “The United States is not going to default. It never has and it never will.” The speaker, though, simply said, “I’ve done everything in my power to make sure we will not default.”

Democrats said there is room to “come together” on spending cuts as part of the budget process, but quickly jumped on McCarthy’s refusal to rule out the possibility of default, with Schumer saying the Republican is “greatly endangering America.”

“To use the risk of default, with all the dangers that has for the American people as a hostage and say it’s my way or no way, are mostly my way or no way, is dangerous,” Schumer said.

McCarthy said Biden had directed their staffs to continue discussions, and that the leaders themselves would convene again in person on Friday at the White House.

Before the White House meeting, both McCarthy and White House press secretary Karine Jean-Pierre insisted it would be simple to avert default — if only the other side capitulated.

The chasm between these opposite postures is fomenting uncertainty that is roiling financial markets and threatens to turn into a tidal wave that swamps the country’s economy. The meeting was timed to begin after U.S. financial markets closed for the day.

McCarthy said today that a federal debt deal is needed by next week if Washington is to meet the June 1 deadline, and he said he saw no reason why both sides couldn’t come to an agreement quickly over Republican ideas for cutting spending in exchange for raising the debt limit.

“I don’t think it’s that difficult,” McCarthy told reporters at the U.S. Capitol.

Biden and the Democrats don’t see it that way. The president is insisting that raising the debt limit is nonnegotiable, with spending restraints addressed separately as part of the annual budget process.

House Republicans recently passed a sweeping bill to slash spending, an opening offer in negotiations. But that legislation has no chance in the Democratic Senate and the White House has threatened to veto it.

Referring to the House bill, McCarthy said, “We both said default is not an option — but only one of us took action.”

Expectations for a breakthrough today had been low.

Default, officials say, would have sweeping impacts, threatening to disrupt Social Security payments to retirees, destabilize global markets and tilt the nation into a potentially debilitating recession.

Already looking past the meeting, Biden on Wednesday is to go to Westchester County, New York, where he plans to deliver a speech on how proposed spending cuts approved by House Republicans could hurt teachers, older adults needing food aid and veterans seeking health care.

It’s part of a broader campaign by Biden to try to paint the Republican cuts as draconian. Aides believe that message both strengthens his position in talks with the GOP and boosts his nascent 2024 reelection effort. His Wednesday visit will be to a congressional district won by Biden in 2020 but now represented by a Republican, Rep. Mike Lawler.

Because the House Republican bill does not specifically spell out which federal programs would be cut, Democrats have gone on offense warning of steep hits to popular programs. The Democratic-aligned group House Majority Forward announced a $1 million campaign today amplifying such cuts, while the House Republicans’ campaign committee countered with its own effort portraying Democrats as “addicted to spending.”

While calling for a “clean” increase to the debt limit, Biden has said he is open to discussion about how to reduce the federal deficit. His budget plan would trim deficits by nearly $3 trillion over a decade, mainly through tax increases on the wealthy and changes such as letting the government negotiate over prescription drug prices.

By contrast, the bill that passed the House with Republican votes would achieve $4.5 trillion in deficit savings through cuts in spending, eliminating tax breaks for investing in clean energy, and reversing Biden’s plans to reduce the burdens of student loan debt.

While the financial markets have started to show some jitters, the business community has thus far largely avoided backing either side in the showdown and instead called for a deal to be struck.

“Securing a bipartisan path forward to raise the debt ceiling could not be more urgent,” said Josh Bolten, the head of the Business Roundtable, a group that represents CEOs. “The cost of a default, or even the threat of a default, is simply too high.”

The U.S. Chamber of Commerce suggested its own priorities for a swift deal today, saying “there are no two better places to start than permitting reform and an agreement on spending caps.”

Biden’s refusal to negotiate on the debt limit is informed by his first-hand experience in 2011, when he was Barack Obama’s vice president and the administration made painful concessions to Republicans in an effort to avoid default. Biden has told aides it’s an experience he refuses to repeat, not just for himself, but for future presidents.

Notably, though, the administration has not ruled out a short-term increase in the debt limit that would align the deadline to increase federal borrowing authority with the talks on government spending that must be resolved by Sept. 30.

There is the possibility that Biden could act on his own, possibly invoking the 14th Amendment of the U.S. Constitution that says the validity of the federal debt shall not be questioned.

Biden said his staff had studied the issue and that he wants his lawyers to pursue the matter further, but added, “I don’t think that would solve our problem now.” He added, “The problem is it would have to be litigated.”

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