McCarthy warns of ‘dire ramifications’ over Biden debt limit negotiation position

Speaker Kevin McCarthy (R-Calif.) sent a letter to President Biden on Tuesday blaming him for any negative consequences that come from the looming debt ceiling deadline and suggesting several areas of negotiation for spending reductions and reforms.

“With each passing day, I am incredibly concerned that you are putting an already fragile economy in jeopardy by insisting upon your extreme position of refusing to negotiate any meaningful changes to out-of-control government spending alongside an increase of the debt limit,” McCarthy said in a letter to Biden on Tuesday.

“Your position – if maintained – could prevent America from meeting its obligations and hold dire ramifications for the entire nation.”

McCarthy and Biden have not held a White House meeting to discuss the debt limit and spending since Feb. 1. The Speaker in the Tuesday letter asked the White House to reach out to set up a date for a next meeting by the end of the week.

McCarthy also laid out some areas of negotiation, suggesting reducing non-defense government spending to pre-inflationary levels and limiting out-year growth; rescinding unspent COVID-19 funds, increasing work requirements on those without dependents who receive government assistance; and taking measures to “lower energy costs” and increase security at the U.S.-Mexico border.   

“Taken together, such policies would help address the number one issue facing Americans today: Stubbornly high inflation brought on by reckless government spending,” McCarthy said.

Republicans are pushing Democrats and Biden to agree to spending cuts as a condition of raising the debt limit, but the White House has called on Republicans to accept a “clean” debt limit increase without any conditions.

“It’s time for Republicans to stop playing games, agree to a pass a clean debt ceiling bill, and quit threatening to wreak havoc on our economy,” White House press secretary Karine Jean-Pierre said overnight before the letter was sent. “And if they want to have a conversation about our nation’s economic and fiscal future, it’s time for them to put out a Budget – as the President has done with his detailed plan to grow the economy, lower costs, and reduce the deficit by nearly $3 trillion.”

House Republicans have said their budget, which was originally expected before mid-April, will be delayed due to the White House budget being delayed weeks past the statutory deadline (a regular occurrence for presidents).

“Mr. President, simply put: you are on the clock. It’s time to drop the partisanship, roll up our sleeves, and find common ground on this urgent challenge,” McCarthy said.

Congress is expected to have to act on the debt in order to avoid default by sometime this summer, but the Treasury Department has not projected a specific date by which Congress must act.