WASHINGTON — House Speaker Kevin McCarthy called on Democrats to engage in talks with Republicans over a fiscal plan including an increase in the federal debt limit, while the White House reiterated its rejection of such negotiations, highlighting the risk of a market-rattling battle over the ceiling later this year.
“I would like to sit down with all the leaders and especially the president and start having discussions,” McCarthy said Tuesday at the Capitol. He noted the government is about six months away from running out of cash. “Who wants to put the nation through some type of threat at the last minute with the debt ceiling? Nobody wants to do that.”
Republicans now in control of the House have been demanding deep spending cuts as the price for an increase in the statutory ceiling on federal debt. President Joe Biden and congressional Democrats demand the limit to be raised without conditions — a message reiterated hours after McCarthy spoke.
“This is something that should be done without conditions,” White House press secretary Karine Jean-Pierre said when asked if Biden will sit down with Republicans to discuss lifting the debt limit. “We’ve been very, very clear about that. We are not going to be negotiating over the debt ceiling.”
Senate Majority Leader Chuck Schumer reinforced that message as well, saying it would be “reckless” to try and bargain with the nation’s debt.
“There should be no political brinkmanship with the debt limit,” the New York Democrat said in a statement.
The remarks from the two sides suggested no early willingness to engage on a challenge that’s expected to come to a head as soon as June. Failure to boost the ceiling would raise the likelihood of a U.S. payments default, an event Treasury Secretary Janet Yellen and her predecessors in the role have warned would be catastrophic for the financial system and the economy.
McCarthy rejected the Democrats’ preference for a simple hike to the ceiling. “I don’t see why you would continue the past behavior.” He said Democrats should negotiate to “set a budget, set a path to get us to a balanced budget and let’s start paying this debt off.”
The speaker said he is seeking changes to major entitlement programs as well as to annual discretionary spending that funds the operating budgets of federal agencies.
“Let’s sit down and find a place where we can protect Medicare and Social Security for the future generations, let’s put our house in order in how we are going to spend — and let’s make the investments we need to make America stronger,” McCarthy said.
Jean-Pierre said, “Congressional Republicans are threatening to hold the nation’s full faith and credit — a mandate of the Constitution — hostage to their demands to cut Social Security to cut Medicare and to cut Medicaid — brinksmanship that threatens the global economy.”
Yellen told congressional leaders on Friday that the government will start deploying extraordinary accounting measures on Jan. 19 to avoid running out of cash. She said while it’s impossible to specify now when those measures will be exhausted, it’s unlikely to be before early June.
McCarthy said that after an initial conversation with Biden upon becoming speaker, he has not had an invitation for a follow-up meeting on the debt ceiling.
Part of the deal McCarthy struck with ultraconservatives from his party to get their votes in the drawn-out House speaker election was to use the debt limit as leverage to force budget cuts, though without specific amounts or programs targeted.
Arizona Sen. Kyrsten Sinema, who switched her affiliation from Democrat to independent in December, said Tuesday that McCarthy’s struggle to gain his post this month after 15 ballots doesn’t bode well for negotiations on the U.S. debt ceiling.
She called McCarthy a “dear friend” but said that he made concessions to far-right conservatives over a speakership election spanning “several days in a row” that could cause real snarls in the process.
Speaking at the Davos International Economic Forum, Sinema said “a deeply broken system” of partisanship in Congress has harmed chances to find compromises.
