McCarthy Amps Up Criticism Of Biden’s ‘Extreme’ Position On Debt Ceiling Negotiations

Topline

House Speaker Kevin McCarthy (R-Calif.) raised alarms about the debt ceiling negotiation stalemate with the White House in a new letter Tuesday, demanding the Biden Administration respond about next steps in negotiations by the end of the week—but the White House is digging in on its position that any spending cuts must be tied to budget talks, not the debt ceiling.

House Speaker Kevin McCarthy (R-Calif.) talks to reporters after the House narrowly passed the … [+] “Parents’ Bill of Rights Act,” at the Capitol in Washington, March 24, 2023. (AP Photo/J. Scott Applewhite, File)

Key Facts

McCarthy told Biden he is “incredibly concerned that you are putting an already fragile economy in jeopardy,” adding that his refusal to negotiate on the debt limit is “extreme.”

The letter comes nearly two months after Biden and McCarthy last met to discuss the debt limit, which the U.S. exceeded in January, prompting the Treasury Department to take “extreme measures” to prevent the government from defaulting on its debt.

McCarthy repeated several proposals for cutting spending in exchange for raising the debt ceiling, such as rolling back unspent Covid-19 relief funds, and policy priorities, including border security.

McCarthy’s comments were echoed by House Financial Services Committee Chair Rep. Patrick McHenry (R-N.C.), who told Punchbowl News on Tuesday: “I’ve never been more pessimistic about where we stand with the debt ceiling.”

The White House fired back at McCarthy’s letter on Tuesday, reiterating its position that House leadership should present a counter-budget proposal if it wants to negotiate government spending, urging “Republicans to stop playing games, agree to a pass a clean debt ceiling bill, and quit threatening to wreak havoc on our economy,” Biden spokesperson Andrew Bates said.

What To Watch For

The government will exhaust its ability to borrow money between July and September if Congress does not agree to raise the $31.4 trillion debt ceiling before then, the Congressional Budget Office projects.

Key Background

Democrats have also amplified their rhetoric against Republican spending proposals in recent weeks amid two high-stakes negotiations (the budget and the debt limit) surrounding the federal government’s fiscal priorities this year. Republicans have floated spending rollbacks that fiscal experts say are nearly impossible to achieve without drastic cuts to nearly every agency, including balancing the budget within the next 10 years without raising taxes and making changes to Social Security and Medicare programs. Democrats highlighted those fraught spending priorities in a counter-attack against Republicans who criticized Biden’s budget as it was released earlier this month. Biden said he is ready to meet with McCarthy to discuss the fiscal year 2024 spending plan “if he has his budget.” Echoing Biden’s rhetoric, House Minority Leader Hakeem Jeffries (D-N.Y.) suggested Republicans are withholding their plan because it will inevitably include cuts to programs they’ve promised to preserve, including Medicare, Social Security and veterans’ benefits, telling reporters earlier this month “the House Republican budget plan is in the witness protection program, it’s in hiding.”

Tangent

Republicans told Politico last week they are considering attaching a policy that would speed up the process for renewable energy and fossil fuel projects to the debt ceiling negotiations. While McCarthy has not publicly commented on the possibility of linking the permitting changes to the debt ceiling talks, he alluded to it in his letter to Biden on Tuesday, writing that potential policy proposals “include but are not limited to …measures to lower energy costs” and “make America energy independent.”

Topline

Key Facts

What To Watch For

Key Background

Tangent

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