WASHINGTON — President Joe Biden will meet with congressional leaders Tuesday as Washington scrambles to lift the debt ceiling with less than a month before the federal government is set to run out of money.
Biden last met with House Speaker Kevin McCarthy — the California Republican whose support he will need to hike the borrowing limit in the House — in February. The stakes now are far higher than they were during their last huddle. This time, the other three top congressional leaders will attend: Senate Majority Leader Chuck Schumer, D-N.Y.; Senate Minority Leader Mitch McConnell, R-Ky.; and House Minority Leader Hakeem Jeffries, D-N.Y.
Lifting the debt ceiling is necessary for the government to cover spending commitments already approved by Congress and the president and prevent default. Doing so does not authorize new spending. But House Republicans have said they will not lift the limit if Biden and lawmakers do not agree to future spending cuts.
The White House has stressed that while it is open to discuss spending cuts, it will not negotiate with Republicans on the debt ceiling. The Biden administration has said the GOP has a constitutional responsibility to raise the borrowing limit.
“Those two are totally unrelated. Whether you pay the debt or not, doesn’t have a damn thing to do with what your budget is,” Biden said Friday. “They’re two separate issues — two. Let’s get it straight.”
The Treasury Department has started to take extraordinary steps to keep paying the government’s bills, and expects to be able to avoid a first-ever default at least until early June. Treasury Secretary Janet Yellen warned Monday that failure to hike the debt ceiling would cause an “economic catastrophe.”
Defaulting on sovereign debt would wreak havoc on the economy and roil markets around the world. A Moody’s report last year said a default on Treasury bonds could throw the U.S. economy into a tailspin as bad as the Great Recession.
If the U.S. were to default, gross…
Read the full article here