House Speaker Kevin McCarthy (R-Calif.) tweeted On Friday, he accepted an invitation from the White House to meet with President Joe Biden to end a standoff over raising the debt ceiling that could jeopardize the country’s economy if the situation drags on.
McCarthy tweeted that he intends to “discuss a responsible increase in the debt ceiling to address irresponsible government spending” after White House press secretary Karine Jean-Pierre extended an invitation during a news conference on Friday.
The White House had previously indicated Biden was unwilling to make concessions to persuade the Republican-controlled House to raise the debt ceiling.
McCarthy earlier this month vowed to a group of far-right Republicans that he would demand significant spending cuts in exchange for raising the debt ceiling — a vow he made to secure the votes he needed to win the speaker’s job.
The federal government hit its debt ceiling of $31.4 trillion on Thursday.
What we don’t know
It’s not clear what spending cuts Republicans might be asking for. There is speculation that the GOP could push for cuts to programs like Social Security and Medicare, but such moves would greatly polarize within the party. Former President Donald Trump said in a campaign video Friday, “Under no circumstances should Republicans vote to cut a single penny from Medicare or Social Security.”
What to look out for
Treasury Secretary Janet Yellen has begun taking “extraordinary measures” to avert a potential debt default, which includes reallocating funds from certain agencies and halting some new investment. Yellen said the moves were intended to avert a potentially catastrophic default by June 5, which has been dubbed the “X-date” for the national debt.
Most experts believe that a default in debt would push the economy into a recession, and even the risk of one has caused stocks to plummet before. Sluggish negotiations between former President Barack Obama and Republicans in Congress in 2011 caused great market volatility and prompted the S&P credit rating agency to downgrade the country’s credit rating. If an agreement isn’t reached by the “X-date,” the federal government will be unable to pay most of its bills, likely threatening numerous federal programs. The US has never defaulted on its debt in history.
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