Top Republican to meet Biden to lift debt ceiling

WASHINGTON: Top Republican Kevin McCarthy said he would meet Wednesday with Joe Biden to discuss avoiding a US debt default, but warned the president must rethink his refusal to consider spending cuts in exchange for raising the borrowing limit.

“I want to find a reasonable and a responsible way that we can lift the debt ceiling,” while controlling what he called “runaway spending” by Congress, McCarthy told CBS Sunday show “Face the Nation.”

The talks will be McCarthy´s first with the president since he became speaker of the House of Representatives this month after Republicans won control of the chamber. The raising of the national debt limit -- which allows the government to pay for spending already incurred -- is often routine.

But members of the new House Republican majority have threatened to block the usual rubber-stamping of that increase above the current $31.4 trillion. And Biden has said he will not negotiate over the matter.

Raising the debt ceiling “is an obligation of this country and its leaders to avoid economic chaos,” White House spokeswoman Karine Jean-Pierre said recently. “Congress has always done it, and the president expects them to do their duty once again.”

That sets the stage for a high-stakes clash in the weeks ahead. A US debt default could trigger a “global financial crisis” causing an increase in borrowing costs and undermining the role of the dollar as an international reserve currency, Treasury Secretary Janet Yellen has warned.

To provide time for the two parties to find a solution, the Treasury Department on January 19 began taking “extraordinary measures” to help temporarily reduce the amount of outstanding debt subject to the limit and avoid a default, which Yellen warned could come as early as June.

But while McCarthy expressed confidence “there will not be a default,” he argued Democrats were guilty of historically high spending levels during the first two years of the Biden administration.

“We can´t continue down this path,” he said on CBS. “So I want to sit down together, work out an agreement that we can move forward to put us on a path to balance.” He added: “I think the president will be willing to make an agreement together.”

Jean-Pierre has said the Biden-McCarthy meeting would also cover the president´s plan to cut the US budget deficit “by making the wealthy and big corporations pay their fair share,” rather than, as some Republicans propose, cutting politically sensitive social spending.