On Sunday, United States House Speaker Kevin McCarthy vowed that the country would not default on its national debt as the U.S. reaches its $31.4 trillion spending limit in June this year. However, he said that the administration could not continue to spend yearly over what it gathers in taxes. The speaker told CBS’s “Face the Nation” show that he has scheduled a meeting with President Joe Biden on Wednesday to discuss protracted debt ceiling dialogs over many months.
Kevin McCarthy, the House Speaker, pledged Sunday that the United States would still pay its national debts despite approaching the $31.4 trillion spending limit in June. He pointed out that the government can only afford to spend what it takes in taxes each year.#KevinMcCarthy pic.twitter.com/sDP08q234Z
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The U.S. government must increase its debt limit before it cannot pay its outstanding bills. The U.S. has always succeeded in repaying its debts, including Treasury notes held by China, Japan, and individual citizens. However, its credit rating was lowered in 2011 during a prolonged dispute between President Obama and Republican lawmakers regarding spending before they finally reached a decade-long agreement. President Biden and the Democrats desire a straightforward increase in the debt limit, unconnected to future spending. On the other hand, GOP leaders demand restrictions on future expenditures to control annual deficits that frequently surpass $1 trillion.
Wasteful Spending in Washington
According to McCarthy, the country’s current debt represents 120% of its national GDP, a significant increase in recent years due to two major factors: the tax cuts approved by Republicans under former President Trump and the aid relief for the coronavirus pandemic approved by both Trump and Biden. McCarthy stated that this debt level had not been seen since World War II. Hence it is not sustainable. He added that there’s a general agreement that there’s wasteful spending in Washington that can be cut.
The speaker wants to work towards a mutually agreed solution for achieving a balanced budget and maintaining the security of the debt. The speaker believes the budget should be balanced by making government departments more efficient, effective, and accountable instead of solely relying on printing money.
Additionally, the speaker and President Biden have decided not to cut Social Security and Medicare, which are highly regarded government programs. The speaker wants to examine every government expenditure to eliminate waste thoroughly. They equate government spending to a family budget, asking whether the solution is to raise the debt ceiling limit or analyze spending critically continuously.
Biden Asks About McCarthy’s Spending Plan
The White House has confirmed a meeting between Biden and McCarthy on Wednesday to discuss a variety of topics. Biden hopes to strengthen his working relationship with McCarthy and inquire about the latter’s spending plans, pointing out that the GOP’s first bill this year to reduce IRS funding would increase the deficit.
The White House stated that Biden would ask McCarthy if he intended to fulfill his Constitutional duty to prevent a national default like previous House and Senate leaders have done. Biden emphasizes that the economic security of all Americans should not be used as leverage to impose unpopular cuts on working families.
The White House’s stance on lifting the debt limit, which is the U.S.’s borrowing authority, is firm. Biden is unwilling to consider policy changes in exchange for the debt limit increase, which was reached earlier in the month. Biden has rejected negotiating spending cuts and recently conveyed to Democratic congressional leaders that Republicans are considering reducing Social Security and Medicare programs. Furthermore, the Treasury Department has temporarily prevented default through “extraordinary measures,” but it’s only a temporary solution.
Approximately ten years ago, a fresh cohort of Tea Party-aligned House Republicans came to power, eager to challenge the Obama administration on reducing government spending and reducing the country’s rising debt. As Vice President, Biden was at the forefront of those talks. However, a compromise could not be reached between the House Republicans and the White House, resulting in a fiscal crisis. This time, Biden and the Democrats in Congress have no intention of negotiating with the new breed of conservative Republicans headed by the Freedom Caucus.