The Treasury Department warns that the U.S. could default on some of its bills as early as June 1. The urgency of raising the nation’s debt limit was underscored by the President, who called McCarthy in Israel, where the California Republican was leading a congressional delegation. The White House said they will meet on May 9.
This move is an abrupt change for the President, who has insisted that he wouldn’t negotiate with McCarthy and has complained that Republicans are trying to “ransom” spending cuts in return for raising the borrowing limit.
The White House statement didn’t say that the President is willing to discuss a trade-off of spending cuts in exchange for increasing the debt limit. The brief announcement said that Biden invited House Minority Leader Hakeem Jeffries, New York Democrat; Senate Majority Leader Charles E. Schumer, New York Democrat; and Senate Minority Leader Mitch McConnell, Kentucky Republican, for the high-stakes talks.
WATCH: BILL BARR HAS A SENSE OF HUMOR AFTER ALL
The announcement puts Biden and McCarthy in a high-stakes game of chicken. House Republicans have long demanded spending cuts in exchange for lifting the debt ceiling, and they approved legislation last week to achieve that goal.
May 02, 2023
Biden has refused to negotiate, saying Democrats and Republicans have contributed to the national debt. With time running out, it wasn’t apparent whether Biden’s position would hold. The House-passed legislation would raise the debt ceiling by $1.5 trillion until May 2024 in exchange for $4.8 trillion in spending cuts.
WATCH: JERRY SEINFELD GIVES US THE REAL REASON BEHIND THE DECLINE OF COMEDY
Apart from raising the debt limit, the Republican bill would cut federal spending by $130 billion for the upcoming fiscal year and limit budget growth to 1% annually over the next decade. The legislation also rescinds at least $90.5 billion in unspent pandemic relief, imposes new work requirements on welfare, cancels Biden’s student loan forgiveness program, and scraps $200 billion in green-energy tax credits.
WATCH: IT STARTS WITH A FLAG, BUT WHERE DOES IT END?
The U.S. can’t legally default on its debt, but a failure by Congress to raise the cap on how much the federal government can borrow could spark a funding crisis for significant programs. Treasury officials said Monday that they expect the government to borrow more than $1.4 trillion from April through September to meet its spending obligations.
Many Republican and Democratic lawmakers agree that the Constitution requires the federal government to honor its debt. That means even if Congress and the White House can’t agree on raising the debt ceiling; incoming tax revenue would be used to pay the roughly $500 billion in annual interest owed to the nation’s creditors.
MUST WATCH: IT'S IMPOSSIBLE TO MAKE THIS UP (FUNNY)
The government would be able to spend only what it takes in from taxes, which means it would stop paying — or default — on some of its obligations. Despite the U.S. coming close to the brink of a first-ever default, Democrats say the bill passed by McCarthy is a non-starter. The White House and Chuck Schumer are launching a full-scale push to discredit the legislation. Schumer plans to hold a public hearing this week on the bill to “expose its true impact” on everyday Americans.
ELON MUSK SLAMS U.S.-UKRAINE'S "INSANE" SECURITY AGREEMENT
“We’ll show the American people how the ‘default act’ would rip away [food stamp] benefits for over a million recipients and eliminate Pell grants for tens of thousands of student loan borrowers,” Schumer said. Democrats hope to capitalize on the fact that House Republicans circumvented the standard committee process to pass the bill and then departed Washington for a weeklong recess.
SCARY SH*T! ANTI-TALIBAN RESISTANCE LEADER WARNS OF IMMINENT U.S. TERROR ATTACK
“No [House] committee with jurisdiction over spending issues had a chance to hold a hearing or a markup,” said a senior Senate Democratic aide. “The American people don’t know what’s in the bill because of that process, but we’re happy to show them.” Democrats believe that, with McCarthy and his lieutenants absent from Washington, they can define the bill on their terms.
AN EMPTY PODIUM SPEAKS VOLUMES FOR FANI WILLIS...
“We’ll show the American people how the [bill] would cut critical funding to nearly all sectors of American life, leading to fewer jobs, higher costs, and leave policemen, first responders, Border Patrol and our brave veterans all hanging out to dry,” Schumer said. Even before the hearing was announced, White House officials warned that if the Republicans’ proposed cuts were implemented, at least 2,000 Border Patrol agents and 81,000 healthcare workers at the Veterans Affairs Department could be laid off.
The argument stems from the Republicans’ reluctance to explain where the $130 billion in immediate cuts would be made. Republican lawmakers have said any spending bill for the upcoming fiscal year will have to be $130 billion less than the $1.7 trillion government funding bill passed by Congress in December. Democrats say the move could be excruciating if the cuts are implemented across the board.
The Department of Veterans Affairs said it could see a 22% percent cut under the Republicans’ debt limit bill. The VA said that would translate to high backlogs and worse services for America’s veterans. “The proposal would mean 30 million fewer veteran outpatient visits, and 81,000 jobs lost across the Veterans Health Administration. … The Veterans Benefits Administration would eliminate more than 6,000 staff, increasing the disability claims backlog by an estimated 134,000 claims,” the VA said in a press statement.
The Republican legislation does not cite specific cuts to the VA or its programs. Still, it also does not include safeguards to ensure the agency is unaffected by the proposed spending decreases. House Republicans say budget cuts would be targeted at domestic programs and not aimed across the board at every federal department.
“Let me repeat this again, and we’re going to repeat it several times,” said House Veterans Affairs Committee Chairman Mike Bost, Illinois Republican. “No cuts to the VA budget. No veteran will lose benefits. Their benefits are owed to them.”
Discover alternative ideas that will make you think
Engage in mind bending debate
Earn points, rise in rank, have fun
