President Biden to Speaker McCarthy: Say You Won’t Default on US Debt

President Joe Biden (L) and House Minority Leader Kevin McCarthy (R-Calif.) in file images. (Getty Images)

President Joe Biden wants to avoid a default on U.S. financial obligations while spending an estimated $421 billion more than projected revenues this year. House Speaker Kevin McCarthy (R-Calif.) wants to balance the nation’s budget and reduce federal spending.

In advance of a February 1 meeting between the two, the White House released a memo doubling down on the president’s commitment to raising the debt ceiling and calling Republicans to clearly state their plan for reducing spending.

Authored by Brian Deese, director of the National Economic Council, and Shalanda Young, director of the Office of Management and Budget, the Jan. 30 memo addressed to “Interested Parties” states the president’s objectives for the upcoming meeting.

The president will ask McCarthy to agree that the United States will never default on its financial obligations and to state when he will release the Republican budget.

Biden’s Line in the Sand

Biden has said he will not negotiate over raising the debt ceiling because failure to do so would cause the United States to default on its financial obligations, causing significant fallout in the U.S. and world economies.

“I will not let anyone use the full faith and credit of the United States as a bargaining chip,” Biden said on Jan. 26 while making remarks on the U.S. economy in Springfield, Virginia.

The memo restates that commitment.

U.S. House Minority Leader Kevin McCarthy (L) attends a meeting with U.S. President Joe Biden (R) and other Congressional Leaders at the White House in Washington on Nov. 29, 2022. (Kevin Dietsch/Getty Images)

“As the president has said many times, the United States must never default on its financial obligations. Raising the debt ceiling is not a negotiation; it is an obligation of this country and its leaders to avoid economic chaos.”

McCarthy has already stated that he intends to avoid that outcome, though perhaps not emphatically enough to satisfy the White House.

In a Jan. 29 interview on “Face the Nation”, McCarthy said, “I want to sit down together, work out an agreement that we can move forward to put us on a path to balance, at the same time, not put any—any of our debt in jeopardy at the same time.”

“But avoid a default, in other words?” the interviewer asked.

“Yes,” McCarthy said.

Rep. James Comer (R-Ky.), chairman of the House Oversight Committee, stated that more directly in a Jan. 30 interview at the National Press Club in Washington.

“We’re not going to default,” Comer said.

“But Republicans are going to fight for spending cuts. And I think the American taxpayer should be thankful that somebody in this town realizes that you can not continue to spend a trillion dollars a year more than you bring in.”

Republicans Want Spending Cuts

McCarthy has said that Medicare and Social security are “off the table” in any talks about reducing the budget. But the speaker has been cagier about naming targets for reduction.

“I want to look at every single dollar we’re spending, no matter where it’s being spent,” McCarthy said, “I want to eliminate waste wherever it is.”

Biden will ask McCarthy for specifics, suspecting that cuts to Medicare, Social Security, and the Affordable Care Act may be proposed despite the speaker’s earlier comments.

Biden also wonders if the GOP’s proposed budget will actually increase deficit spending by making tax cuts for the wealthiest Americans and large corporations.

The current debt limit is $31.4 trillion, approved by Congress in 2021. It would have been exceeded on Jan. 19, except for “extraordinary measures” taken to avoid a default, according to U.S. Treasury Secretary Janet Yellen.

Those actions will likely extend the deadline for raising the debt ceiling to sometime in June.

McCarthy’s office did not respond with a comment before deadline.