Mar 31, 2023
White House Rejects GOP Plan to Jump-Start Talks on Debt Ceiling
(Bloomberg) -- The White House is holding the line that there will be no debt-limit negotiations with House Speaker Kevin McCarthy, dismissing the latest Republican gambit to draw President Joe Biden to the table — a bill that would raise the cap but also include spending cuts.
“We’ve been very, very clear about this, the debt limit should be dealt with without conditions, without negotiations,” White House Press Secretary Karine Jean-Pierre told reporters Friday on Air Force One en route to Mississippi, when asked about the prospect of House legislation pairing a debt-limit hike with spending cuts and other Republican priorities.
Republicans are seeking cuts to domestic spending in exchange for delivering a debt-limit increase, but Biden insists the two issues should not be linked. The president has repeatedly said he won’t sit down with McCarthy for the separate budget talks until the speaker produces a budget plan that details Republicans’ fiscal proposals.
At the heart of the strategy is a White House belief McCarthy and Republicans are dragging their feet on a budget because the speaker lacks the votes needed to pass one. Biden released his fiscal 2024 budget blueprint three weeks ago.
The back-and-forth shows the stalemate is likely to continue — even if Republicans pass the bill — as the US stares down a potential debt default that could send shock waves through its economy.
Earlier: White House Demands GOP Budget They Think McCarthy Can’t Deliver
McCarthy meanwhile has rebuffed those demands and blamed Biden for the impasse. On Thursday, he told reporters if Biden continued to refuse to negotiate, House Republicans would unveil a bill that combines a debt-ceiling increase with other measures.
“The conference is very close. If the president doesn’t act, we will,” the speaker said. “I think the markets would be very excited that one entity here is taking action.”
McCarthy sent Biden a letter earlier this week that outlined his demands for a debt-ceiling increase, proposals that include reducing domestic spending to pre-pandemic levels, clawing back unspent Covid-19 pandemic funds, implementing tougher work requirements on some benefits and cutting regulations on energy projects. The GOP bill would be based on those proposals, McCarthy said.
Read more: McCarthy Says GOP Finalizing Debt Limit-Energy-Spending Bill
“Again, we’re not negotiating,” Jean-Pierre said Friday. “We’re talking about the full credit of this nation and so we should not be holding that hostage.
“If House Republicans want to talk about a budget, want to show us what they value, what they see as fiscally responsible, and show that to the American people and want to have that conversation, the president is happy to do that,” she added.
The Treasury Department is employing extraordinary measures to avoid a debt-limit breach but the cap must be raised this summer to avoid a default that would deal a blow to the US economy and markets.
--With assistance from Josh Wingrove and Erik Wasson.
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