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House Speaker Kevin McCarthy said on Monday that debt limit talks with Democrats and President Joe Biden are “not in a good place,” saying that Biden had delayed talks for 100 days.
A debt ceiling meeting has been scheduled for 3 p.m. ET on Tuesday. The meeting was originally set for last Friday but was postponed.
Adding to the pressure, Treasury Secretary Janet Yellen said in a letter to the congressional leadership on Monday that her department won’t be able to pay the federal government’s debts if the debt ceiling is not raised or suspended by June 1—an estimated deadline she provided in May but has now confirmed.
Republicans and Democrats have a little more than two weeks to make a deal or the United States government will catastrophically default on its $31.4 trillion in debt.
“We only have so many days left,” McCarthy told reporters on Monday. Compounding the pressure to finalize a deal before the deadline, Biden is also scheduled to leave the country on Wednesday for Group of Seven meetings in Japan.
“The president decided to wait 100 days before he would negotiate. He treated this the same way he treated the border [crisis]—he wanted to ignore the problem,” McCarthy added.
McCarthy said Biden and the Democrats “would have to get serious about negotiating” before he’d feel like their meetings are successful. “They would have to really talk about where they’re going to go,” McCarthy said.
“I don’t think we’re in a good place, I know we’re not. This ignoring the problem, thinking it will go away … he could bumble his way into a default just like he did on the border.”
McCarthy has sought to use the threat of defaulting on the nation’s debts to force Democrats to limit their spending. “Save, and grow,” he said of the GOP’s economic strategy.
“Time is of the essence,” was McCarthy’s message for Biden on Monday. He has argued that the government can’t continue to spend money at the pace it is now.
An increase in the debt limit would not authorize new federal spending. It would only allow for borrowing to pay for the policies and legislation what Congress has already approved.
“I’m really concerned that the Senate hasn’t passed anything. I’m really concerned that the president waited 100 days before he’d even talk to us. I’m really concerned about the president’s continued spending, of what it will do to Medicare and social security,” McCarthy said on Monday. “I’m really concerned about … instead of the Democrats sitting down, realizing we have a division in government, and being honest and adult and discussing this but simply lying about what we’re doing.”
Yellon said on Monday in her letter to the congressional leaders that the Treasury’s borrowing costs have already increased substantially as time draws nearer to the June 1 deadline to resolve the impasse.
“We have learned from past debt limit impasses that waiting until the last minute to suspend or increase the debt limit can cause serious harm to business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States,” Yellen wrote in her letter.
“In fact, we have already seen Treasury’s borrowing costs increase substantially for securities maturing in early June. If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.”
Yellen’s assessment has left open a possible time extension on a national default.
“The actual date Treasury exhausts extraordinary measures could be a number of days or weeks later than these estimates,” she wrote. “I will provide an additional update to Congress next week as more information becomes available.”
Biden has expressed hope that an agreement can be reached with McCarthy and other congressional leaders at their Tuesday meeting.
“I remain optimistic because I’m a congenital optimist,” Biden told reporters while out for a bike ride on Sunday in Rehoboth Beach, Delaware. “But I really think there’s a desire on their part as well as ours to reach an agreement. I think we’ll be able to do it.”
