WASHINGTON: Following a warning from the Treasury that the government might not have enough money to pay its bills by June 1, US President Joe Biden has invited four top congressional leaders to the White House the next week to discuss the grave economic situation of the country.
In a letter to Congress, Treasury Secretary Janet Yellen stated that without congressional action, the agency “potentially may not be able to make all US government payment commitments by June 1.
In Washington, where Democrats and Republicans were preparing for a protracted impasse, the projection increased the danger that the United States is heading for a historic default that would rock the global economy.
Biden contacted Republican House Speaker Kevin McCarthy, who was in Jerusalem on a diplomatic mission, to invite him to a meeting on May 9 at the White House. Since February, the two haven’t met to discuss the problem.
Additionally, Hakeem Jeffries of the House of Representatives, Chuck Schumer of the Senate, and Mitch McConnell of the Republican Party all have received invitations from Biden. McConnell said he and Biden had a “good conversation” today and added, “I’m sure we’ll be speaking again.”
Last week, the House passed a resolution to increase the debt ceiling that included significant cutbacks to spending on everything from healthcare for the poor to air traffic controllers. Biden and the Democratic-controlled Senate have said they would not support the measure.
Biden has adamantly stated that he would not compromise on raising the debt ceiling but will talk about spending cutbacks when a new cap is enacted. Congress frequently combines raising the debt ceiling with other budget and spending legislation.
On May 9, Biden will “stress that Congress must take action to avoid default without conditions,” according to a White House official, despite his prior declaration that he wouldn’t meet McCarthy at all to address the debt ceiling.
Yellen previously assured Congress that Treasury will use exceptional cash management techniques to maintain debt payments, government benefit payments, and other expenditures after hitting the $31.4 trillion borrowing maximum on January 19. Suspending the sales of securities used by state and local governments to temporarily store funds is one of the actions Treasury is taking.
A comparable debt ceiling battle in 2011 brought the nation dangerously close to default and resulted in the downgrading of the nation’s excellent credit rating. Negotiations may be considerably more challenging this time, according to veterans of the 2011 face-off.
