May 30, 2023

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Still no deal, but progress between Joe Biden and the opposition

D-10. When a U.S. default threatens, Joe Biden And the opposition leader, Kevin McCarthy, wanted to hope for a way out of the crisis on Monday, May 22, but their differences have yet to be overcome.

“I just finished a productive meeting” with the Republican boss of the House of Representatives, the US president said in a statement, calling for “good faith” negotiations to find a budget compromise. He acknowledged the persistence of “differences” that both men’s teams would have to iron out in the shortest possible time.

At Secretary Treasure Janet Yellen Well-remembered the stock of the meeting, once again emphasized on Monday, that after June 1, the United States is likely to experience a shortage of public money.

As he received the Speaker of the House of Representatives in the Oval Office, the US President assured that he was “optimistic” about the possibility of a “breakthrough” at the end of the meeting.

At the end of the meeting, Kevin McCarthy assessed, “We had a constructive discussion on the areas of disagreement but we had no agreement”. “I think the tone tonight was better than before,” he added, but “we still have philosophical differences.”

The duo, who had already seen each other twice within two weeks with other heads of parliament, this time met face-to-face. The summit, in Joe Biden’s absence, was aimed at resuming discussions at the level of advisers’ groups that had apparently turned sour this weekend.

An 80-year-old Democrat just returned from the summit G7 In Japan, he had initially planned to extend his diplomatic tour in Oceania, but a political-budgetary imbroglio in Washington forced him to cut his trip short.

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Hostage

To eliminate the risk of bankruptcy, Congress — a Democratic-led Senate and a Republican-majority House — must vote to raise the maximum authorized public debt ceiling. Republicans want to drastically cut public spending. Joe Biden, who is campaigning for re-election in 2024 on a social justice pledge, opposes it.

Asked on CNN before the meeting, Kevin McCarthy wanted to be optimistic, promising that “what we’ve negotiated will be the right solution to get us on the right track by the majority of Republicans.” The US president told him on Monday that he was certainly in favor of reducing the deficit, but needed to be “interested in tax loopholes and making sure the rich pay their fair share”.

The “debt ceiling,” more than $31 trillion — a world record — was reached months ago, but the federal government has so far managed the situation through accounting arbitrations.

In the event of a default, the US would no longer be able to repay holders of Treasury bills, the king of global financial investments. The government can no longer provide fixed salaries to government employees, or pensions to veterans. Many economists warn that the consequences for the US and global economy could be catastrophic.

Constitution

If so, who will give first? A US president who knows full well that a recession, whatever its political origins, will compromise his chances of re-election? Or is Kevin McCarthy, depending on a handful of radical elected officials, calling on him — like former President Donald Trump — not to “bend”?

The Democratic left is forcing Joe Biden to invoke the 14th Amendment to the US Constitution, which prohibits the First World Power from “questioning” its debt.

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In this case the government will issue new loans as if there was no debt ceiling. However, this strategy is fraught with legal risks, especially when someone like Joe Biden anchors the Supreme Court firmly to the right.

With AFP