As an intensifying standoff over the debt ceiling roiled the nation’s capital, President Biden traveled to New York on Wednesday to assail Republicans and make the case for urgent congressional action to stave off default.
Taking the stage in a Hudson Valley community he won in the 2020 election, Biden swiped at the House GOP majority for trying to leverage a key fiscal deadline to advance its policy agenda, arguing that the party’s approach would harm vulnerable populations, slash veterans’ benefits and undermine the fragile economy.
President Biden speaks to reporters on Tuesday after meeting with House Speaker Kevin McCarthy, R-Calif., and other congressional leaders to discuss the debt ceiling and federal spending. Demetrius Freeman/The Washington Post
“They’re literally, not figuratively, holding the economy hostage,” the president stressed.
Biden delivered the broadside a day after he huddled with House Speaker Kevin McCarthy, R-Calif., and other Democratic and Republican leaders in a discussion that laid bare the widening chasm between the parties with as few as three weeks left to avert a crisis.
At the heart of the matter is the debt ceiling, the legal maximum that the U.S. can borrow to cover its expenses. In defiance of Biden’s threats, House Republicans adopted a bill last month that coupled an increase in the borrowing cap with sharp spending cuts and other policies, including a repeal of programs to combat climate change and cancel student loans.
With tensions running high, and time short, White House and congressional aides huddled privately Wednesday, and Biden has invited McCarthy and other congressional leaders back for a second meeting on Friday. The new flurry of activity offered the faintest hope that Democrats and Republicans might resolve their differences – even as they continued sparring with each other publicly in the meantime.
In choosing Valhalla, N.Y., Biden looked to deliver his message in what he saw as politically advantageous territory – a congressional district represented in the House by Rep. Michael Lawler, N.Y., a Republican. The venue reflected the president’s heightened efforts to pressure vulnerable Republicans on the debt limit, though Biden at one point veered from that script, praising Lawler as reasonable and moderate.
“Republican Congressman Mike Lawler’s here as well. Mike’s on the other team,” Biden said. “But you know what? Mike is the kind of guy that, when I was in Congress, there was a kind of Republican I used to deal with.”
Lawler later took note of the dissonance, pointing out after Biden’s speech the discrepancy between official White House tweets accusing him of extreme positions on veterans benefits and the president’s own conciliatory words about him. “Their messaging, I think, obviously, is a little off,” he told reporters afterward.
Back in Washington, McCarthy tried to rally his conference earlier Wednesday, encouraging them to hold their ground – while showing them polls that suggested Republicans had public support for their debt ceiling gambit. GOP lawmakers emerged from the gathering unified in their demand that Biden comes to the table and strike a deal, insisting they did not seek a default even as the deadline rapidly approaches.
“Looks like we’ve got kind of a dangerous game of chicken going on,” acknowledged Rep. Steve Womack, R-Ark., a top appropriator.
The stalemate threatened to generate new panic and frustration from Washington to Wall Street, more than a decade after a similar Republican effort to leverage the debt ceiling brought about a downgrade in the country’s credit rating, costing taxpayers more than $1 billion through higher interest payments.
This time, the exact deadline – known as the “x-date” – remains unclear. The Treasury Department warned last week that the United States could breach the debt ceiling as soon as June 1, even as it cautioned that its estimate hinges on tax receipts that have fluctuated greatly in recent months. Other estimates, including one issued this week from the Bipartisan Policy Center, have found the deadline could fall between June and August.
A default could prove catastrophic, potentially disrupting Social Security checks, veterans’ care, and many other government services. It could upend the U.S. economy, possibly resulting in the loss of millions of jobs and other repercussions domestically and abroad. Already, the mere prospect of default has rattled investors, troubled the bond market, and prompted at least two credit agencies to signal they are watching closely for signs of political dysfunction.
In a bid to prevent a fiscal calamity, Biden opened new talks Tuesday with McCarthy and other top lawmakers: House Minority Leader Hakeem Jeffries, D-N.Y., Senate Majority Leader Charles E. Schumer, D-N.Y., and Senate Minority Leader Mitch McConnell, R-Ky. The roughly hour-long discussion came 97 days after Biden and McCarthy held their inaugural meeting, which the newly minted House speaker described at the time as productive.
In an ominous sign, McCarthy exited that meeting Tuesday on a defiant note. He attacked Biden for failing to entertain his party’s proposal for spending cuts, recounting to reporters: “I asked him numerous times, ‘Are there some places we could find savings?’ He wouldn’t give me any. So I’m hopeful that we’ll be able to find them.”
Biden later countered that he had presented a blueprint in the form of a 2024 budget, which aimed to reduce the deficit, chiefly through tax increases on wealthy Americans and corporations – an idea that Republicans flatly rejected. Instead, the president said he would be open to discussing spending cuts, just “not under the threat of default,” restating his preference that Congress turn to the issue later as part of the annual process to fund the government.
On Wednesday, Biden also raised alarm over the depth of cuts sought by Republicans, who proposed rolling back spending to the levels adopted in the 2022 fiscal year. Their legislation does not specify where, exactly, the savings would be achieved, prompting the president to accuse Republicans of trying to strip funds from critical agencies that aid veterans and other Americans – a charge that GOP leaders deny.
“If MAGA Republicans get their way, America defaults on our debt, higher interest rates for credit cards, car loans, mortgages,” Biden said. “Payments for Social Security, Medicare, our troops, veterans could all be halted or delayed.”
“8 million Americans would lose their jobs, including 400,000 New Yorkers alone,” the president continued. “Our economy would fall into recession and our international reputation would be damaged in the extreme.”
For their part, House Republicans maintained Wednesday they did not want the U.S. to default – and they blamed any such calamity on Biden for failing to negotiate for months. Yet many Republicans took care to share little about how much if at all, they might be willing to compromise in pursuit of a deal. Rep. Kevin Hern of Oklahoma – the leader of the Republican Study Committee, the largest bloc of GOP lawmakers – stressed that the party “shouldn’t negotiate with ourselves” as discussions proceed at the White House.
The evident stalemate raised the stakes for the resumption of bipartisan talks, set for Friday, at which point there “might only be two weeks left” to avert default, acknowledged House Majority Leader Steve Scalise, R-La., at a news conference. “We’re going to wait and see how that process plays out.”
Olorunnipa reported from Valhalla.
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