Debt Negotiation Stalls... US Biden "Cannot Accept Republican Demands"

Warnings are pouring in that the United States could face an unprecedented default as early as June if the federal government fails to raise the debt ceiling, amid which President Joe Biden has taken a firm stance that he cannot accept the Republican demands in the related negotiations. As the debt ceiling talks, which had shown signs of progress, have stalled again, concerns over a U.S. government default are spreading once more.

[Image source=AP Yonhap News]

President Biden, who is visiting Japan to attend the Group of Seven (G7) summit, stated at a press conference on the 21st (local time) before returning home that he "honestly cannot accept" the demands made by the Republicans in the working-level negotiations between the White House and the GOP regarding the debt ceiling increase. While he said a solution could be found before a default, he pointed out that "the other side (Republicans) must move away from their extreme position."

On his way back, President Biden is scheduled to speak with House Speaker Kevin McCarthy, a Republican, aboard Air Force One. He said, "I will not agree to a deal that protects wealthy tax cheats while putting feeding programs for one million Americans at risk," and argued, "The Republicans must accept that if they insist on partisan conditions, there will be no bipartisan agreement." He then referred to a previous meeting, saying, "All four congressional leaders from both the Democratic and Republican parties agreed with me that default is not an option," and added, "I expect each of them to live up to that promise."

After their second meeting last week, both President Biden and Speaker McCarthy expressed that there would be no default, raising expectations that the related negotiations would soon conclude. However, as the stances between the White House and the Republicans remained deadlocked, Speaker McCarthy eventually announced later in the week that he would not negotiate until President Biden returns from the G7 summit.

The Republican Party, which holds the majority in the House, has long insisted on large-scale government spending cuts as a precondition for raising the debt ceiling, while President Biden has maintained that tax reform through increased taxes on the wealthy must be considered. On this day, Biden said, "The Republicans say such (wealth tax) revenues are off the table, but they are not," explaining, "That is why there continues to be a significant difference in views." This confirmed the stark contrast in their positions.

Some analysts suggest that the Biden administration may ultimately take emergency measures to raise the debt ceiling without congressional approval based on the 14th Amendment. President Biden said on this day, "We are looking into whether we have the authority under the 14th Amendment. I believe we do." Earlier, on the 9th, he had introduced expert opinions supporting the legality of invoking the 14th Amendment. However, concerns remain that if this provision is invoked, lawsuits could be filed, potentially halting the process to raise the debt ceiling.

The United States exhausted its $31.4 trillion debt ceiling in January and has been relying on special measures since then. If Congress does not raise the debt ceiling, an unprecedented default could trigger inevitable consequences such as job losses and financial market turmoil. The so-called X-day, when the Treasury Department, led by Secretary Janet Yellen, estimates cash will run out, is June 1.

This content was produced with the assistance of AI translation services.