Debt ceiling battle update after White House meeting.

Debt Ceiling Negotiations: What You Need to Know

Little Movement from Both Sides

House Speaker Kevin McCarthy (R-CA) met with President Joe Biden on Tuesday to discuss debt ceiling negotiations, but little progress was made. Another meeting is set for Friday, but neither side has signaled a willingness to budge.

What is the Debt Ceiling?

The debt ceiling is the amount of money the United States government is legally allowed to spend on its current obligations, including Social Security and Medicare benefits, military salaries, interest on the national debt, and tax refunds. Congress has raised the debt limit 78 times since 1960.

Why is it Important?

A failure to raise the debt ceiling would force the state to default on its debts, resulting in an economic catastrophe, and the U.S. would likely enter another recession. Republicans and Democrats in Congress have both recognized the dangers of the prospect. Treasury Secretary Janet Yellen said the country could default by June 1 if the debt ceiling isn’t raised.

What’s the Holdup?

Though both parties agree that a default would be disastrous and should be avoided at all costs, Republicans are using the prospect of default to leverage several concessions from Democrats. Some of the concessions House Speaker Kevin McCarthy is seeking are setting some work requirements for welfare benefits, and cutting government spending in a number of areas. Biden and the Democrats have decried the cuts and pledged not to budge.

Where do Negotiations Stand Currently?

Despite optimism from some, a sit-down meeting at the White House on Tuesday with Congressional leadership appeared to go nowhere. Another meeting is set for Friday, but there haven’t been any signs that either side plans to cede any ground.

Will Biden Use the 14th Amendment to Avoid a Default?

Biden said he is “considering” using the 14th amendment to avoid a default of the nation’s national debt. The possibility of Biden using the amendment to sidestep Congress on raising the debt ceiling has been a repeat topic of conversation as the deadlines draws near. The prospect of Biden using the amendment to solve the debt crisis is untested, however, and would likely trigger a legal battle if put into effect.

What’s Next?

Another meeting is set for Friday, but there haven’t been any signs that either side plans to cede any ground. McConnell has pledged to take the risk of default off the table, but McCarthy has yet to. Biden expressed doubt about using the amendment on Tuesday, saying it would “have to be litigated, and in the meantime, without an extension, it’d still end up in the same place.”