“Raising the debt ceiling is not a negotiation; it is an obligation of this country and its leaders to avoid economic chaos.”
memorandum the White House sent to House Speaker Kevin McCarthy (R-Calif.) ahead of his Wednesday meeting with U.S. President Joe Biden amid concerns that congressional Republicans will try to force unpopular spending cuts in exchange for raising the country’s arbitrary borrowing limit to prevent a global financial crisis.
“Mr. President: I received your staff’s memo,” McCarthy
tweeted Tuesday. “I’m not interested in political games. I’m coming to negotiate for the American people.”
The document—authored by National Economic Council Director Brian Deese and Office of Management Budget Director Shalanda Young—and McCarthy’s response came after the speaker
claimed Sunday during an appearance on CBS News‘ “Face the Nation” that he would take cuts to Medicare and Social Security “off the table” but also wants to “look at every single dollar we’re spending, no matter where it’s being spent,” and “eliminate waste wherever it is.”
As
Common Dreams previously reported, McCarthy added that “we’ve got to make sure we strengthen” those programs but declined to elaborate on how—which White House spokesperson Andrew Bates called “the latest giveaway that House Republicans have been telling the truth over the last year as they reiterate time and again that they want to cut Medicare and Social Security.”
Before the splintered GOP took control of the U.S. House of Representatives and McCarthy ultimately
won the speakership—after 15 votes and various concessions to far-right members of his party—supporters of Medicare and Social Security urged Democrats to lift the debt limit during the lame-duck session, fearing Republicans’ threats to attack the social safety net programs.
However, Democrats in Congress refused to act after the midterms last year, setting up the current debt ceiling battle—which requires Treasury Secretary Janet Yellen to
take “extraordinary measures” to temporarily prevent the first-ever U.S. default.
CBS‘ Margaret Brennan on Sunday asked McCarthy whether he “will guarantee” that the United States will not default on its debt.
“We’re not going to default,” he responded while arguing that, in the months ahead, “the responsible thing to do is sit down like two adults and start having that discussion. Unfortunately, the White House was saying before, like they wouldn’t even talk. I’m thankful that we’re meeting on Wednesday, but that’s exactly what we should be doing. And we should be coming to a responsible solution.”
Citing GOP sources, CNNreported Monday that “privately, Republicans have floated a range of ideas in exchange for an increase in the debt limit, including capping domestic spending at fiscal 2019 levels and bringing defense programs down.”
Reiterating his aim to “negotiate” cuts—even if they aren’t to Medicare or Social Security—McCarthy insisted Sunday that “there will not be a default. But what is really irresponsible is what the Democrats are doing right now, saying we just raise the limit.”
The White House and other critics have taken such comments as the Republican leader not committing to preventing a default.
“Speaker McCarthy’s unwillingness to-date to taking the threat of default off the table makes him an outlier, including among current and former leaders of his own party,” says the new memo, pointing to statements from not only Biden, Senate Majority Leader Chuck Schumer (D-N.Y.), and House Minority Leader Hakeem Jeffries (D-N.Y.) but also Senate Minority Leader Mitch McConnell (R-Ky.) and former Republican Presidents Donald Trump and Ronald Reagan.
“In Wednesday’s meeting, President Biden will seek a clear commitment from Speaker McCarthy that default—as well as proposals from members of his caucus for default by another name—is unacceptable,” the document continues. “President Biden will ask Speaker McCarthy to publicly assure the American people and the rest of the world that the United States will, as always, honor all of its financial obligations.”
As Government Executivereported Tuesday:
There is no blueprint for how the government would operate if it reached and broke through its debt ceiling, though it is clear agencies would not be able to carry out their normal operations. Because typical spending outpaces the revenue the Treasury Department brings in on a given day, the federal government would only be able to pay 60% of its bills in a given month of a default scenario, according to a Bipartisan Policy Center estimate.
Analysts and Treasury officials have sketched out two possible outcomes during a default: The government would either delay payments until it collected enough revenue to cover them, or prioritize some payments while allowing others to go unpaid. In either scenario, agency payments to beneficiaries, states, grantees, contractors, and, potentially, their own employees, could be disrupted. Some federal workers could be furloughed or asked to continue working on the promise of back pay in the future.
The White House memo highlights that the debt ceiling is just one of two of Biden’s priorities for the Wednesday meeting. The president also plans to ask, “When will Speaker McCarthy and House Republicans release their budget?”
“President Biden will release a budget on March 9,” according to the memo. “It is essential that Speaker McCarthy likewise commit to releasing a budget, so that the American people can see how House Republicans plan to reduce the deficit—whether through Social Security cuts; cuts to Medicare, Medicaid, and Affordable Care Act (ACA) health coverage; and/or cuts to research, education, and public safety—as well as how much their budget will add to the deficit with tax cuts for the wealthiest Americans and large corporations, as in their first bill this year.”
Asked on Monday what his message for McCarthy will be, Biden said, “Show me your budget, I’ll show you mine.”
