McCarthy says Biden has made no debt ceiling progress

Republican House Speaker Kevin McCarthy has stated that the debt ceiling talks between House Republicans and the Biden administration have made “no progress” as the possibility of the United States’ first-ever default looms. McCarthy calls for Congress to occasionally raise the debt ceiling, which is the maximum amount that can be borrowed. The government spends more than it recovers in tax revenue, which results in a deficit.

“I’m always an optimist. I’m not now,” said McCarthy (R-Calif.) to the press.

The United States government has already surpassed its debt ceiling, resulting in the Treasury’s use of “extraordinary measures” to make payments. However, if there is no increase or suspension, the administration is set to utilize its emergency measures this summer. The White House hopes for Republican action to raise the ceiling, but Republicans want to decrease government expenditures. Democrats believe that Republicans only bring up the borrowing cap when a Democrat is president in office. They claim that Republicans have raised the debt ceiling while enabling new spending and tax breaks for the wealthy under previous President Donald Trump.

Almost two months have passed since McCarthy and Biden’s original meeting to discuss debt ceiling measures, with no new developments or plan.

McCarthy labeled the non-negotiation attitude “extreme” in a letter he sent to Biden, stating that action is required. McCarthy expressed his readiness to continue the conversation and come to an agreement.

“It’s time to drop the partisanship, roll up our sleeves, and find common ground on this urgent challenge,” urges McCarthy to the White House to contact his team as soon as possible.

Republicans’ desired spending cuts are still somewhat ambiguous, and House Republicans have also been urged by President Biden to present a budget from their end and start discussions on spending from there, but no budgets have been presented so far. However, Biden’s plan calls for a minimum tax of 25% on the wealthiest Americans to reduce the deficit by $3 trillion over ten years. McCarthy suggests in his letter that non-defense expenditure should cut back to “pre-inflationary levels.” He also intends to tighten the job requirements for entitlement recipients without dependents.

“It’s time for Republicans to stop playing games, agree to pass a clean debt ceiling bill, and quit threatening to wreak havoc on our economy… And if they want to have a conversation about our nation’s economic and fiscal future, it’s time for them to put out a budget,” said Karine Jean-Pierre, press secretary to the White House.

If the United States goes into default, the gross domestic product (GDP) would decline by 4%, and 6 million people risk losing their employment. The consequences of not raising the debt ceiling would be disastrous for the American economy, resulting in disrupted market activity, the economy more broadly, and ceasing everyday operations within the federal government.

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