President Joe Biden and Republican House Speaker Kevin McCarthy meet on Wednesday to discuss the $31.4 trillion U.S. debt ceiling, a first test of how the two leaders will work together, or not, in a divided Washington.
The Democratic president and Republicans, who won control of the U.S. House of Representatives in November’s elections, are locked in a standoff over raising the federal government’s borrowing cap.
Failure to reach a deal by June could lead to a default that would shake the global economy.
The Oval Office talks will likely serve as the opening bell for months of back-and-forth maneuvering. Neither side expects a solution to emerge from a single meeting.
Biden will ask McCarthy to release a specific budget plan and to commit to supporting the nation’s debt obligations, according to a White House memo seen by Reuters. Biden’s public schedule allows for nearly two hours for the men to interact starting at 3:15 p.m. ET (2015 GMT).
House Republicans want to use the debt ceiling as leverage to exact cuts in spending by the federal government, though they have yet to unite around any specific plan. The increase covers the costs of spending programs and tax cuts previously approved by Congress, and is usually voted in on a bipartisan basis.
The White House says it will discuss future federal spending cuts with Republicans, but only after the debt ceiling is lifted.
The 80-year-old president, a longtime former senator who served as vice president during a similar 2011 showdown that led to a historic downgrade of the federal government’s credit rating, enters the talks with what some of his aides believe is a strong hand that includes a narrow Senate majority, a party that is unified on this issue and a strong message for voters.
Speaker for less than a month, McCarthy, 58, leads a fractious House Republican caucus with a narrow 222-212 majority that has given a small group of hardline conservatives outsized influence.
Despite years of mingling with other Washington lawmakers, Biden has little personal history with McCarthy, who joined the Republican leadership on Capitol Hill under former Speaker John Boehner after Biden had already left to become Barack Obama’s vice president.
Just one in four Republicans serving in the House today held their seats in 2011, and some may not be fully aware of the risks of courting default, or the difficulties of negotiating in a divided government.
Unlike most other developed countries, the United States puts a hard limit on how much it can borrow, and Congress must periodically raise that cap because the U.S. government spends more than it takes in.
The 2011 crisis was resolved with a bipartisan deal that cut spending and raised the debt limit but left Obama administration officials smarting. Many felt they had given up too much and had still harmed the economy by letting talks persist.
McCarthy has less room to maneuver than his Republican counterpart in 2011 did. To win the speaker’s gavel, he agreed to enable any single member to call for a vote to unseat him, which could lead to his ouster if he seeks to work with Democrats. He also placed three hardline conservatives on the Rules Committee, which would allow them to block any vote on a compromise.
Biden seemed to question McCarthy’s ability to keep Republicans in line at a fundraiser in New York on Tuesday, calling McCarthy “a decent man, I think,” but noting the concessions he made to become speaker.
McCarthy, for his part, said Biden needed to be willing to make concessions to get a debt-ceiling increase through Congress, saying it would be “irresponsible” not to negotiate.
Moderate Republican Representative Don Bacon said Biden must not ignore the calls to constrain spending, now that Republicans control the House after two years out of power.
“The president refusing to negotiate is a non-starter. I think that’s the main message,” Bacon said. “You’re going to have to meet me halfway.”