US Could Default On Its Debt by June 1st, Janet Yellen Warns

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01 May 2023, 8:15 pm

https://www.npr.org/2023/05/01/1173148677/debt-ceiling-limit-default-standoff


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01 May 2023, 11:47 pm

So, what else is new for those crooks in Washington? They all should be executed, then hung in public display by their genitals.

From now on, this country will be known as Mahagonny.



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02 May 2023, 7:35 am

President Biden invites top congressional leaders to debt ceiling meeting

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President Joe Biden has called the top four congressional leaders to a meeting May 9 at the White House to discuss how to avert a debt default, according to a White House official and Capitol Hill sources familiar with the matter.

Treasury Secretary Janet Yellen warned in a letter Monday that the U.S. could breach the debt ceiling by June 1 — earlier than expected — if Congress doesn't act in time. The letter sent shock waves across Capitol Hill, with the threat of economic calamity looming, as Congress and the White House remain deadlocked over the issue.

There was little sign Monday afternoon that either party was shifting off its position. House Republicans insist on attaching spending cuts to a debt ceiling increase, while Democrats vow not to negotiate over whether to pay the country's bills or default.

The White House official said Biden will "stress" to congressional leaders that they "must take action to avoid default without conditions," saying the meeting was scheduled to discuss "the urgency of preventing default," as well as how to begin negotiating a budget.

Democrats have insisted on a “clean” debt limit increase without policy conditions and for Congress to negotiate over spending cuts Republicans demanded in the separate government funding process, which has a deadline of Sept. 30.

“That is the appropriate place to debate and discuss our nation’s fiscal picture — not in a hostage-situation in which extreme MAGA Republicans try to impose their radical agenda on America,” Senate Majority Leader Chuck Schumer, D-N.Y., and House Minority Leader Hakeem Jeffries, D-N.Y., said in a joint statement Monday evening.

“We do not have the luxury of waiting until June 1 to come together, pass a clean bill to avoid a default and prevent catastrophic consequences for our economy and millions of American families. Republicans cannot allow right-wing extremism to hold our nation hostage," they wrote.

Biden also called Congress' top two Republicans, House Speaker Kevin McCarthy of California and Senate Minority Leader Mitch McConnell of Kentucky, on Monday, even as McCarthy is in Israel on an official trip.

Republicans have continued to call on Biden to hash out a deal with McCarthy, while Democrats have insisted on lifting the threat of default before budget negotiations take place.


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02 May 2023, 8:23 am

ASPartOfMe wrote:
President Biden invites top congressional leaders to debt ceiling meeting
Quote:
President Joe Biden has called the top four congressional leaders to a meeting May 9 at the White House to discuss how to avert a debt default, according to a White House official and Capitol Hill sources familiar with the matter.

Treasury Secretary Janet Yellen warned in a letter Monday that the U.S. could breach the debt ceiling by June 1 — earlier than expected — if Congress doesn't act in time. The letter sent shock waves across Capitol Hill, with the threat of economic calamity looming, as Congress and the White House remain deadlocked over the issue.

There was little sign Monday afternoon that either party was shifting off its position. House Republicans insist on attaching spending cuts to a debt ceiling increase, while Democrats vow not to negotiate over whether to pay the country's bills or default.

The White House official said Biden will "stress" to congressional leaders that they "must take action to avoid default without conditions," saying the meeting was scheduled to discuss "the urgency of preventing default," as well as how to begin negotiating a budget.

Democrats have insisted on a “clean” debt limit increase without policy conditions and for Congress to negotiate over spending cuts Republicans demanded in the separate government funding process, which has a deadline of Sept. 30.

“That is the appropriate place to debate and discuss our nation’s fiscal picture — not in a hostage-situation in which extreme MAGA Republicans try to impose their radical agenda on America,” Senate Majority Leader Chuck Schumer, D-N.Y., and House Minority Leader Hakeem Jeffries, D-N.Y., said in a joint statement Monday evening.

“We do not have the luxury of waiting until June 1 to come together, pass a clean bill to avoid a default and prevent catastrophic consequences for our economy and millions of American families. Republicans cannot allow right-wing extremism to hold our nation hostage," they wrote.

Biden also called Congress' top two Republicans, House Speaker Kevin McCarthy of California and Senate Minority Leader Mitch McConnell of Kentucky, on Monday, even as McCarthy is in Israel on an official trip.

Republicans have continued to call on Biden to hash out a deal with McCarthy, while Democrats have insisted on lifting the threat of default before budget negotiations take place.


I see this as a political game of chicken in front of a freight train for both parties. Unfortunately they are playing this game at our expense. If they fail to fix the budget in time, we might want to consider cleaning them all out, that is if we still have a government left to do so with.



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02 May 2023, 10:54 am

Here's what's gonna happen. Both sides will continue to bicker and argue and do nothing. Our country will default on its debt. We will all suffer financially because of it especially those on welfare. The Republicans will use this opportunity to blame democrats. More MAGAts will be elected into our government and then we will be ruled by a fascist GQP until the day we are inevitably nuked off this God forsaken Earth.


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02 May 2023, 1:23 pm

How is the US govt. managing to spend all this money? They have no public healthcare and very limited social security...

The UK has the NHS and decent social security but no threat to default on its debts.


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02 May 2023, 2:34 pm

Rossall wrote:
How is the US govt. managing to spend all this money? They have no public healthcare and very limited social security...

The UK has the NHS and decent social security but no threat to default on its debts.


That money goes either to tax breaks for the rich or fund the military industrial complex.


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02 May 2023, 3:36 pm

Aspiegaming wrote:
That money goes either to tax breaks for the rich or fund the military industrial complex.


Great :roll: They would have been better sticking with Obama if their nutty constitution allowed it.. Trump was a right wing twat and Biden comes across as a bit clueless.


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02 May 2023, 4:26 pm

House Democrats prepare long shot plan to try to force debt ceiling increase

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House Democratic leadership has been working behind the scenes on a long shot plan that could allow their party to go around Speaker Kevin McCarthy and force a vote to raise the debt limit, even if an agreement isn't reached with the Republican majority.

The strategy centers on what's called a discharge petition -- a rare and complicated procedural tool that allows members of the House to move a bill out of a committee and bring it to the floor without the support of the majority party leadership.

The petition requires 218 signatures to force a vote. That would mean Democrats would need to get the support of at least five Republicans.

Even after those signatures are secured, the process to get to a final vote is cumbersome. It involves waiting out the clock and a variety of tricky procedural moves. For example: Once lawmakers have enough signatures, they still must wait seven legislative days.

They also have to wait for a "discharge day," which only comes around on the second and fourth Monday of each month.

Even so, Democrats are laying the groundwork for such a petition.

In a letter to House Democrats on Tuesday, House Minority Leader Hakeem Jeffries wrote that California Rep. Mark DeSaulnier introduced legislation back in January that "could be used as a vehicle to avert the Republican-manufactured default crisis."

And though the House is in recess this week, Democrats just filed a special rule to take the next step in the process for using a discharge petition.

"The filing of a debt ceiling measure to be brought up on the discharge calendar preserves an important option," Jeffries wrote. "It is now time for MAGA Republicans to act in a bipartisan manner to pay America’s bills without extreme conditions. We will be in direct contact next week upon our return to Washington in connection with the discharge effort."

The party, Jeffries wrote, is "working to make sure we have all options at our disposal to avoid a default."

That plan will unfold in the background of closely watched maneuvering between the White House and House Republicans, who each contend the other side bears responsibility for addressing the $31.4 trillion debt ceiling.


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04 May 2023, 3:00 pm

How a U.S. debt default would affect American households

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The consequences are already playing out
Following Treasury Secretary Janet Yellen's announcement Monday about running out of time to pay bills, borrowing costs for the U.S. government soared to more than 5% for June.

This was predictable. In fact, the U.S. did default once, by accident. In 1979, a series of events including the failure of word-processing equipment caused a temporary delay in payments to investors redeeming U.S. Treasury bills, Reuters has reported.

Afterward, the cost of borrowing money for the U.S. increased by 0.6%, the wire service said, adding that an academic paper published a decade later argued that the ratcheting up of borrowing costs for the U.S was permanent.

If the U.S. were to default again, the result would be the same, said Howard Gleckman, senior fellow in the Urban-Brookings Tax Policy Center at the Urban Institute, a nonprofit research group.

As many consumers have learned since the Federal Reserve began its campaign last year to make borrowing more expensive in a bid to slow inflation, higher interest rates affect everything from credit cards to auto loans to mortgages.

"The primary effect would be interest rates going up significantly," Gleckman said. "And they’re already going up quickly and steeply. What this would do is accelerate movement toward higher interest rates."

Meanwhile, businesses would have more trouble getting loans — and, as a result, hiring more workers, Gleckman noted.

Many commercial interest rates have already gone up in the wake of the collapses of Silicon Valley Bank and First Republic Bank.

Timing is terrible
Besides higher borrowing costs for the government, consumers and businesses alike, federal payments might come to a standstill as the Biden administration is forced to confront how to prioritize payments coming due with the funds it still has available.

In other words, it would have to consider whether to pay bondholders before releasing Social Security and Medicare funds.

Gleckman said such direct effects from a default are almost impossible to know, because there is no playbook for handling them.

"We don’t know how [the] Biden admin would treat a default," he said. "Which bills would they pay?"

Yellen has already warned that there is no easy way to reprogram the government's payment systems to favor one set of recipients over another.

“Treasury systems have all been built to pay all of our bills when they’re due and on time, and not to prioritize one form of spending over another,” she said this year, Bloomberg reported.

Wells Fargo economists said in a note to clients last week that even if a payment prioritization plan were implemented, such a plan "would be entirely experimental and would still come with a litany of legal, technical, economic and political challenges."

"The economic impact of a default is highly uncertain since that has never happened previously, but economic modeling suggests the fallout could be quite severe," they wrote.

In a note to clients Wednesday, Capital Economics research group Deputy Chief U.S. Economist Andrew Hunter said, "It may take more serious signs of stress — potentially involving significant volatility in the stock market — to finally push lawmakers into action.


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10 May 2023, 1:21 am

Biden says he’s exploring 14th amendment to defuse debt ceiling standoff

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President Joe Biden on Tuesday said he was “considering” the use of the 14th amendment as a means to circumvent the debt ceiling standoff he currently finds himself in with House Republicans.

But he cast some doubt on whether it could work, saying it would “have to be litigated and in the meantime without an extension it’d still end up in the same place.” The president said he would look at the issue of invalidating the debt ceiling through the 14th amendment “months down the road.” The amendment states that the public debt of the United States “shall not be questioned.”

Biden also refused to rule out a short-term debt limit increase.

“I said I would come back and talk,” he said. “The one thing I’m ruling out is default, and I’m not going to pass a budget that has massive cuts.”

The president’s remarks came at the White House shortly after a meeting he called “productive” with House Speaker Kevin McCarthy and the three other top congressional leaders. But Biden leveled criticism at McCarthy for sometimes making remarks during the meeting that were “maybe a little bit over the top” and for not knowing what he had proposed in his GOP bill.

“Three of the four participants [were] very measured and low key,” Biden said.

Back at the Capitol, McCarthy laughed off the comment, saying: “If you ever spend time with [Senate Majority Leader Chuck] Schumer, you’ll find out who the fourth is.”

On a more serious note, Biden warned that not everyone at the negotiating table pledged to avoid default.

Among only “three of the five, there was substantial movement that everyone agreed that deficit — defaulting on the debt was off the table,” Biden said.

The president is scheduled to meet again Friday with McCarthy, Schumer, Senate Minority Leader Mitch McConnell and House Minority Leader Hakeem Jeffries. Until then, White House staff and aides to the four congressional leaders would continue to hold discussions, those involved said.

Biden is scheduled to leave for Japan in a week for the G-7 summit, but the president said he’d consider delaying his trip if an agreement appeared to be in reach. Underscoring the seriousness of the debt discussions, he called it “the single most important thing that’s on the agenda.”

Canceling the trip, he said, is possible, but not likely.

“In other words, if somehow we got down to the wire and we still hadn’t resolved this and the due date was in a matter of, when I was supposed to be away. I would not go. I would stay till this gets finished,” he said.


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10 May 2023, 2:29 am

Our bloated military budget is a great deal of our debt.


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13 May 2023, 8:51 am

Social Security advocates brace for U.S. debt default with payments to beneficiaries at stake

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With the odds of a U.S. debt default increasing, Social Security advocates warn beneficiaries they should be prepared in case their payments are interrupted.

Negotiations around whether the nation's ability to borrow money should be expanded have been ongoing, but Congress and the White House have yet to reach an agreement on the path forward.

The impasse has placed the U.S. in a precarious financial position, and leaves some of the most vulnerable Americans at risk.

Dan Adcock, director of government relations and policy for the National Committee to Preserve Social Security and Medicare, said there is a "good chance" that in the event of a default, millions of Americans' benefits would be disrupted.

"Seniors should be prepared if they're financially able," Adcock said, adding they should consider putting off discretionary purchases "so they have enough to tide them over."

But millions of beneficiaries have no financial room to maneuver, Adcock said, noting that about 40% of Social Security recipients, which include Americans who are disabled and those who are widowed, receive 90% of their income from the safety net program. That equates to nearly 27 million people.

"Even though we're a few weeks before a default, they won't have enough to squirrel away to cushion for not getting their payments," Adcock said.

Not a foregone conclusion
Analysts suggest it isn't certain that the government will miss payments to Social Security recipients in the event of a default. The matter would likely depend on how much cash is on hand if or when the debt ceiling is breached.

The staggered schedule of Social Security payments, which relies on an individual’s birthdate to determine which part of the month they receive them, means not all beneficiaries would be equally affected in a missed or partial-payment scenario.

The White House and House Republicans remain at odds after meeting on Wednesday to discuss a resolution to the impasse. NBC News Capitol Hill correspondent Ali Vitali reported the meeting was “tense.” Led by House Speaker Kevin McCarthy, the GOP seeks spending cuts from President Joe Biden in exchange for an agreement to raise the debt ceiling and avoid a default.

On Thursday, the White House said a scheduled follow-up meeting had been postponed.

A McCarthy spokesperson did not respond to multiple requests for comment submitted Thursday. Following Tuesday's meeting, he told reporters there was no "new movement” in negotiating positions.

“Everybody in this meeting reiterated the positions they were at,” before the meeting, McCarthy said outside the White House.

Mary Johnson, policy analyst with the Senior Citizens League, a nonpartisan advocacy group, said she is far more pessimistic about a resolution this time around compared with 2011, the last time a debt-ceiling crisis unfolded.

By law, Johnson said, the Social Security Administration cannot spend more money than it has on hand, which she said appears to pre-empt any other possible workaround, absent an agreement between Republicans and the Biden administration.

"We are so extremely divided, and there is such a big chance of a stalemate," Johnson said.

"And the longer we wait and get close to default, the greater the risk to Social Security benefits being held up and delayed, or not paid in full."


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15 May 2023, 4:21 pm

Treasury Secretary Yellen says the U.S. risks breaching the debt ceiling on June 1

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The U.S. is still projected to breach the debt ceiling as early as June 1, Treasury Secretary Janet Yellen reiterated in a new letter to Congress on Monday afternoon.

Yellen's confirmation of the deadline means Congress has less than three weeks to act or risk a first-ever debt default, which carries grave economic consequences and could tip the country into a recession.

“With additional information now available, I am writing to note that we still estimate that Treasury will likely no longer be able to satisfy all of the government’s obligations if Congress has not acted to raise or suspend the debt limit by early June, and potentially as early as June 1," Yellen wrote in the letter.

Yellen’s letter comes one day before an expected meeting between President Joe Biden and Speaker Kevin McCarthy about how to avert an unprecedented — and economically disastrous — debt default. Biden and the Democratic-led Senate have been at odds with the Republican-controlled House on how to tackle the issue.

McCarthy sounded skeptical on Monday morning. “I still think we’re far apart” on debt ceiling negotiations, he said after staff met over the weekend.

“It doesn’t seem to me yet that they want a deal,” he said, referring to Democrats and the White House. “It seems like they want to look like they’re in a meeting. … They’re not talking anything serious.”

It remains unclear what an agreement would look like. The two parties haven't yet established the parameters of the negotiations, though there has been consideration of linking the debt limit to a budget negotiation to satisfy demands from both parties. One hurdle is how to allocate any potential spending cuts between the military and non-defense portions of the federal budget.

“It never is good to characterize a negotiation in the middle of the negotiation,” Biden told reporters on Sunday. “I remain optimistic because I’m a congenital optimist, but I really think there’s a desire on their part as well as ours to reach agreement. I think we’ll be able to do it.”


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16 May 2023, 2:41 am

As debt default looms, America yawns

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A mass shooting in Allen, Texas, and another in Cleveland, Texas. The first-ever indictment of a former president, followed by a sex abuse verdict, followed by the indictment of a sitting congressman. Fighter jets shooting down UFOs over North America. War in Ukraine. Threats of war in Asia. A flood of migrants crossing the southern border. Actual floods in California.

And now a new calamity. A nation that has been deluged with head-spinning news day after day is faced with a budgetary impasse that could set off a recession or worse.

A divided Congress has only about three weeks to raise the country's borrowing limit and thereby keep America from defaulting on its debts. Default has never happened before and could push the U.S. and global economy into harrowing territory, economists say. But for many Americans, that scenario remains an abstraction far removed from day-to-day concerns. And there are signs that a crisis-weary population wants to sit this one out.

A recent focus group convened by the research firm Engagious asked 11 Georgia voters who backed President Joe Biden in 2020 if they worried that the government would blow through a looming deadline and default on its debt. Not one hand went up. Corporate America has largely sidestepped the contentious debate unfolding in Washington.

Tom Daschle, the former Senate Democratic leader, said he was recently briefed on a private poll that showed most of the people surveyed were “skeptical” of the doomsday scenarios. Even those who grasped the potential consequences believed that the two sides would eventually cut a deal staving off default.

“Global investors and Americans more generally appear largely unruffled by the fast-approaching X-date,” said Mark Zandi, the chief economist of Moody’s Analytics and a veteran of Washington spending wars, referring to the date in early June when the Treasury Department forecasts it won't be able to pay the bills. “The stock market remains firm as does the value of the U.S. dollar and much of the bond market. I suspect the key reason for the blasé attitude toward the debt limit is everyone thinks they’ve seen this movie before many times over the years and now know the ending.”

The problem, though, is that while panic is counterproductive in most crises, it may be necessary to resolve this one by putting pressure on elected officials to compromise and avert disaster.

"That financial markets are calm raises the odds that lawmakers won’t act in time, as it likely will take some turmoil in markets to generate the political will necessary to get lawmakers to act,” Zandi said.

A standoff over the debt ceiling in 2011 offers an illustration of both the costs of brinksmanship and a president's persuasive power. Then-President Barack Obama delivered a rare prime-time speech about one week before the government would have breached the debt ceiling. He urged Americans to call Congress and "make your voice heard." The public's response was enthusiastic enough to crash the websites of congressional leaders.

Obama and Republican lawmakers struck a deal days later. They averted default, but considerable damage was inflicted anyway. A Treasury Department report in 2013 — amid yet another debt ceiling debate — concluded that the impasse in 2011 harmed job growth, roiled financial markets and lowered consumer and business confidence.

So far, Biden has given no such prime-time speech. The markets, until now, have mostly shrugged. Google Trends data show far fewer internet searches for terms like "debt ceiling" than in 2013. And the three major cable news channels have mentioned the debt ceiling only a third as much as they did in 2013, according to an analysis prepared for NBC News by Media Matters.

Inside the White House, advisers believe there is still enough time to strike a deal with Republicans and avert disaster. Biden is steadily ratcheting up the pressure on Republicans where they live, traveling recently to a New York swing district represented by a Republican.

"We've not reached the crunch point yet," Biden told reporters on Saturday.

A fresh piece of economic data suggests that the awakening may have begun. A report released Friday by the University of Michigan shows that consumer sentiment is falling "alongside the proliferation of negative news about the economy, including the debt crisis standoff."

In the coming days, Biden will take more questions from the press about the debt ceiling, “Which is a way of helping break through,” a White House aide said.

The White House has also expanded its communications team, tapping Rob Friedlander of the Office of Management and Budget to help explain and lay out its position on the debt ceiling.

“A big part of this is making it clear to the American people what the stakes are so they can communicate that to their representatives” in Congress, the White House aide continued, speaking on condition of anonymity to discuss the White House’s strategy.

The attention paid to the debt ceiling crisis in the Obama era may have been a product of a simpler political time, when a near-existential threat to the nation was an anomaly, not another Thursday. Donald Trump was a reality TV show host, social media was still a novelty and a congressman yelling “you lie” at the president seemed like a really big deal.

“We all have shorter attention spans and crisis fatigue,” said Dan Pfeiffer, who was a top communications official in the Obama White House during those earlier fights.

“Because default was avoided the last two times, there seems to be an assumption from a lot of people and the markets that it will be avoided again,” Pfeiffer said. “That is a deeply naive view in my opinion.”

Both sides are holding out, convinced the other will cave once the pressure is on. But what if pressure never builds because the public and the markets aren’t paying attention?

In the focus group of 11 Georgia voters, the moderator asked how many had followed news about the debt ceiling fight. Only four raised their hands.

Zandi said he believes that public unease will inevitably kick in. “I suspect markets will be calm until they are not. That is, the blasé attitude toward the debt limit will quickly give way to panicked concern literally between one day and the next at some point in the next few weeks,” he said.

Absent pressure from their constituents, Republicans in Congress have space to stake out a maximalist position and insist on sweeping budget cuts in return for raising the debt ceiling.

And the most powerful voice in the party, Trump, is egging them on.

If people have followed the issue at all, they’ve concluded that this is simply one more partisan fight in Washington that reinforces perceptions of broader dysfunction, political analysts from both parties said.

The White House’s belief is that Biden will escape blame if negotiations collapse and that voters will conclude congressional Republicans are at fault. That may be overly optimistic. If the debt ceiling isn’t raised and the worst forecasts come true — stock markets collapse and jobs disappear — people will blame whoever is in charge, starting with Biden, some analysts said.

A former Obama campaign adviser said that inside the Biden White House, some aides are viewing the budget standoff with “unrealism.”

“There are people there who are saying, ‘Oh, people always blame the Republicans because they know the Republicans are crazy,'” this person said, speaking on condition of anonymity to talk freely. “Whereas I believe the blame is more even, or even tilted toward the president.”

It would be a mistake for the White House to assume voters will parse the varying levels of responsibility should default take place, analysts said.

“The American public is not going to follow the ins and outs of how the debt negotiations went south,” said Sarah Longwell, who conducts regular focus groups with voters and who publishes the conservative website The Bulwark. Everyday voters, she said, “are going to blame the people in charge because that’s what people do. They’re going to blame him [Biden] because they’re not following it closely. They’re going to blame the people in charge.”

Some voters may not fully understand the distinction between a government shutdown — something that is comparatively limited and now somewhat routine — and an unprecedented default, which could drive up interest rates on home mortgages and credit cards, and raise the unemployment rate by as much as 5 percentage points.

Controlling a formidable megaphone, Biden is positioned to convey the enormous stakes involved and influence public opinion. But he has much work to do on that front, analysts said.

“Right now, the communication [from the White House] has not been commensurate with the cataclysmic nature of the consequences should this go off the rails,” Longwell said. “People view this as a Washington process story that they’re not focused on.”

“As a partisan conservative, I would say he [Biden] has been a pretty effective president,” said Joe Walsh, a former Republican congressman from Illinois. “He’s just a s--- communicator. He just cannot communicate forcefully enough, and that’s really lacking right now, big time. There’s been zero sense of urgency on his part.“


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16 May 2023, 8:25 pm

Biden and congressional leaders strike optimistic tone after debt ceiling meeting

Quote:
President Joe Biden and House Speaker Kevin McCarthy met Tuesday afternoon to discuss a way to break the logjam on the debt ceiling, with fears of a self-inflicted economic calamity growing as Republicans demand spending cuts.

Leaving the meeting, congressional leaders hinted at some progress. McCarthy, R-Calif., said that the sides remain “far apart" but that “it is possible to get a deal by the end of the week.”

The abridged timeline was front and center in remarks by congressional leaders after the sit-down. McCarthy acknowledged there is a "lot of work to do in a short amount of time" and said it was “unfortunate that we are where we are.” But he said, "If this is where we were in February ... I’d be very optimistic that we’d get this done right away.”

McCarthy praised efforts to streamline the talks, telling reporters that Biden had selected Steve Ricchetti, a close adviser to the president, and Shalanda Young, the director of the Office of Management and Budget, to negotiate directly with the speaker's team. (A White House spokesperson confirmed the selections.) On the Republican side, Rep. Garret Graves, R-La., and aides to McCarthy will take the lead, he said.

Biden is "finally" taking the advice of Senate Minority Leader Mitch McConnell, R-Ky., McCarthy added. "Appoint somebody from the president's team who can work with the speaker's team to see if we could come to an agreement," he said. "Had we done this back 97 days ago, we’d already have a bill."

Biden said there was an “overwhelming consensus” among the leaders that defaulting on the debt was not an option. That outcome would threaten a recession, devastate retirement accounts, force layoffs and deliver a blow to the nation’s reputation around the world, he said.

He said it was a “good, productive meeting,” appearing confident that default could be averted even as the clock ticks and he prepares to leave town.

Before Tuesday, the White House and Democrats had portrayed House Republicans as the only party to the talks willing to accept default as an outcome, heaping pressure on McCarthy as a holdout who risked upending the economy.

Senate Majority Leader Chuck Schumer, D-N.Y., said he was hopeful a deal could be reached as leaders coalesce behind a plan.

“We all came to agreement that we were going to continue discussions," Schumer said. “Hopefully, we can come to an agreement. We don’t have much time. But default is just the worst, worst alternative.”

The White House said that the meeting was “productive and direct” and that Biden hopes to check in with the leaders by phone while he is traveling overseas this week and to meet with them again when he returns.

Biden leaves for Japan on Wednesday to attend a summit of the Group of Seven major industrial countries. With talks continuing and a deal not yet within reach, the White House said Tuesday that Biden would cut his trip short and return Sunday.

The House-passed proposal, negotiated among GOP members and approved on party lines, would require able-bodied adults up to age 55 to work a minimum of 20 hours per week or satisfy other criteria to get food stamps for more than three months every three years.

But staffers have identified potential areas of common ground in daily talks over the last six days, including reform of permitting for energy and infrastructure projects and the possibility of negotiating spending cuts on a parallel track to raising the debt ceiling.

McCarthy had sounded a pessimistic tone Monday, saying: "I don’t think we’re in a good place. I know we’re not.”


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