Biden blasts GOP ‘crazy notions’ amid debt limit showdown

ACCOKEEK, Md. (AP) — President Joe Biden whipped republicans‘ emerging compensation plans to raise the nation’s debt limit only in exchange for spending cuts and other political concessions on Wednesday, declaring that Republican lawmakers are threatening a historic default on US obligations “unless you agree with all these crazy ideas they have.”

His comments in a union hall speech came as House Speaker Kevin McCarthy, who had fought for months to unite Republicans around a unified budget proposal, launched a sweeping plan to restrict expenses to offer the White House along with raising the debt limit by $1.5 trillion. .

But it is far from decided whether McCarthy has 218 Republican votes, a majority in the House, in favor of his proposal, which has no chance of becoming law in the Senate and is intended to jump-start negotiations with the administration. Sailing into crisis, if Congress and Biden cannot agree to raise the cap in the coming weeks, the government would risk being unable to pay its bills and facing a payment default that devastates the economy.

This week’s split-screen presentations, which began with McCarthy delivering a speech on Wall Street, vividly showed how Biden and the speaker are talking to two very different Americas.

Standing in a garage and steel shop, Biden pointedly noted the contrast, telling members of the International Union of Operating Engineers, Local 77 that while “I’m here in the union hall with you, President McCarthy just finished talk to Wall Street two days ago.”

Biden stressed that tightly limiting government spending programs could hurt a middle class already struggling to pay for basic necessities. And demanding concessions in exchange for paying off the nation’s debts is “worse than totally irresponsible,” Biden said, declaring that “America is not a lazy nation.”

“Folks, that’s the MAGA economic agenda: spending cuts for working-class and middle-class folks… with tax cuts for those at the top of the heap,” Biden said, referring to the former president. donald trumpThe slogan of the Make America Great Again campaign. “This is not about fiscal discipline. It’s about reducing the benefits to the people…they don’t seem to care much.”

Commenting in kind, McCarthy said: “President Biden is leaving town to give a speech in Maryland instead of sitting down to address the debt ceiling.” He also insisted that House Republicans were the ones acting responsibly in insisting on reining in the spending habits of the federal government.

“If you gave your child a credit card and they kept going over the limit, you wouldn’t blindly increase the limit. You would change their behavior,” McCarthy said. “The same goes for our national debt.”

The speaker addressed the House shortly before Biden spoke on Wednesday and detailed the Republican plan. Among other provisions, it would recover billions in unspent COVID-19 relief funds, rescind money meant to increase staffing at the Internal Revenue Service, and halt Biden’s effort to write off up to $20,000 in loan debt. student loans for millions of borrowers.

The plan would reduce spending to 2022 levels and place a 1% cap on most future federal spending over the next decade. The proposed debt limit increase would last until some time next year, bringing the issue back into the spotlight during the presidential campaign.

The California Republican argues that excess government spending is increasing inflation, empowering China and threatening the future of Social Security and Medicare.

Biden and McCarthy, who must unite for the good of the US economy, are using diametrically opposed strategies for different audiences, each betting that they will win in the end.

To the extent that the two men have engaged with each other, with no active negotiations thus far, it has only been to provide fodder for attacks.

McCarthy Says Biden Is “Getting In” In Default By Not Meeting With Him; Biden counters that McCarthy has already “threatened to become the first speaker to default on our national debt” unless he gets what he wants in the budget.

To complicate matters for McCarthy, he faces pressure to hold his ground from narrowly-majority conservatives in the House of Representatives, who earlier this year delayed his ascension to the presidency.

But Biden argues that spending cuts would put unacceptable pressure on the government’s ability to meet its constitutional responsibility to meet its obligations. The GOP’s faith in tax cuts has skyrocketed the deficit, he says.

Under the Republican proposal, the debt limit would be extended into next year, McCarthy said. He pushed the White House to negotiate a compromise with Republican lawmakers, noting that voters chose a divided Congress in November’s midterm elections.

So far this year, he said, Biden “has been avoiding the subject for 77 days straight and counting.”

Both men are veterans of the ugly debt limit battle of 2011, when Biden was vice president and McCarthy was a relatively new member of the House Republican leadership. They know the risks of even approaching the debt deadline, like the first downgrade of the US credit rating that occurred that summer. For all postures, the markets generally assume from now on an agreement will be reached as it has been in the past.

But since they have talked to each other, they have rarely talked to each other. The president and the new Republican speaker met in early February but have had little substantive communication since. Instead, the White House has publicly pressed McCarthy to release a Republican budget plan detailing the proposed cuts, which Democrats say are anathema to voters.

Meanwhile, the White House supports Democrats on Capitol Hill who overwhelmingly insist that no concessions be made in exchange for lifting the debt limit.

It’s unclear whether McCarthy’s plan can get 218 votes, a majority in the House, and whether he would have to add other changes, such as repealing the Democrats’ climate, health care and tax law known as the Energy Reduction Act. Inflation, to persuade Republican lawmakers to resist.

Much of the rhetoric now is political stance ahead of the deadline to raise the debt limit before the US hits the ceiling, which is a moving target but is expected in the coming months. The White House has only hardened its no-deal stance since Biden hosted McCarthy in the Oval Office, but most lawmakers and economists believe the two sides will eventually avoid a default.

Wall Street firms, analyzing tax revenues, estimate that doomsday is near. Goldman Sachs this week estimated that the “x date” could be reached in June, at which time the “extraordinary” the steps taken by the Treasury Department to keep the government running would dry up and the bills would start to go unpaid.

Both sides could temper the rhetoric by first and foremost committing to the US government avoiding default on its payments, said Brian Riedl, a senior fellow at the conservative Manhattan Institute. That could help build credibility and show good faith in conversations.

AP Congressional Correspondent Lisa Mascaro and AP Writer Kevin Freking contributed to this report.