Biden says he has the authority to challenge the debt limit, but there’s no time

Biden says he has the authority to challenge the debt | ltc-a

President Biden said Sunday that he believed he had the authority to challenge the constitutionality of the nation’s lending limit, but that he didn’t believe such a challenge could succeed in time to avoid a federal debt default if lawmakers didn’t raise soon the limit.

« I think we have the authority, » Biden said at a news conference following the Group of 7 summit in Hiroshima, Japan. « The question is, could it be done and invoked in time? »

Mr. Biden added that after the current crisis is resolved, he hopes to « find a case and take it to court » to decide whether the debt limit violates a clause in the 14th amendment that stipulates that the United States must pay its debts. He also said that, when meeting with world leaders, he had failed to assure them that America would not default on its debt – an event that economists say could trigger a financial crisis that would sweep the world.

« I can’t guarantee they won’t force a default by doing something outrageous, » Biden said, referring to Republicans in Congress who have insisted on deep cuts to federal spending in exchange for raising the loan limit.

Mr. Biden and President Kevin McCarthy are negotiating a fiscal package that would include raising the loan ceiling. They remain distant on key issues, including federal spending limits, new work requirements for some federal poverty relief recipients, and funding intended to help the IRS crack down on top earners and tax-evading corporations. .

The two men were expected to speak on the phone shortly after the press conference Sunday as Mr. Biden returned to Washington in hopes of re-energizing the crackling talks. The conversation will follow a weekend in which Republican leaders and White House officials exchanged accusations from half a world away, punctuated by Biden’s attacks on Republicans in the press conference.

Treasury Department officials estimate it will take a little more than two weeks before the federal government could lose its ability to pay bills on time, forcing a default. Both Mr. Biden and Mr. McCarthy expressed growing optimism late last week that they could strike a deal that would pave the way for Congress to raise the debt limit while also reducing a portion of federal spending, which Republicans have insisted as a condition for any debt -limit increase.

« The difficulty is that nothing has been agreed, » Mr McCarthy said on Fox News’ Sunday Morning Futures. « All the discussions that we’ve had before, I felt that we were at a point where we could agree together, that we would reach a compromise. »

Instead, McCarthy argued, the president « goes abroad and now wants to change the debate. »

Treasury Secretary Janet L. Yellen is expected to deliver another update to Congress on the federal government’s cash balance this week. On Sunday, Ms. Yellen indicated that her projections that the US might not be able to pay all its bills on time as soon as June 1 have not changed.

« I certainly haven’t changed my rating, so I think it’s a tough deadline, » Ms. Yellen said on NBC’s « Meet the Press. »

Ms Yellen noted that the government had expected to receive substantial tax payments on June 15 which could extend the so-called X date later in the summer. But she warned that it would be very difficult to get to that date and that the odds of getting that far are « pretty low ».

The Secretary of the Treasury, who warned last week that a default « would generate an economic and financial catastrophe, » he said he wasn’t exaggerating the severity of the looming crisis.

“There will be tough choices to make if the debt ceiling isn’t raised,” Ms. Yellen said, explaining that if the US runs out of money to pay all its bills, some would go unpaid.

Those hopes have dimmed at least slightly in the past 48 hours. Biden aides have accused Republicans of backing down on key areas of the negotiations, and Republicans have accused the White House of refusing to change top priorities for conservatives.

Mr. Biden on Sunday criticized Republicans for not considering raising additional tax revenues to reduce future budget deficits as part of the negotiations. He said he has proposed a discretionary spending limit that would save $1 trillion over a decade over baseline projections.

« It is time for Republicans to accept that there are no budget deals to be made solely on their partisan terms, » ​​he said.

Rep. Jodey C. Arrington, a Texas Republican and budget committee chairman, on Sunday flatly ruled out Republicans accepting any tax hikes as part of a debt-limit deal despite the president’s push.

« It’s not on the table for discussion, » Mr. Arrington said on ABC’s « This Week. » « This is not the time to put a tax on our economy or on working families. »

Some of the beards appeared to be intended to shore up the base of each part. Hardline spending hawks in the House have urged Mr McCarthy to ask for much bigger concessions from Mr Biden. Some progressive Democrats have pressed Biden to break off negotiations and instead act unilaterally to challenge the debt limit on constitutional grounds.

Senator Bill Cassidy, a Louisiana Republican, said using the 14th amendment would be an overstatement.

« It’s another example of the president taking constitutionally delegated spending authority from the House of Representatives and trying to aggregate it with the White House, » he said on CNN’s « State of the Union. »

The two sides have struck a deal in talks over the past week, including recovering some unspent funds from previously approved Covid relief legislation. They also broadly agreed to some kind of cap on federal discretionary spending for at least the next two years. But they’re stuck on the details of those caps, including how much overall to spend next fiscal year on discretionary programs and how to divide that spending between military and other programs.

The White House’s latest offer would keep both military and other expenses constant — which include education, scientific research and environmental protection — from the current fiscal year to the next fiscal year, according to a person familiar with both sides’ proposals. That move would not reduce nominal spending before adjusting for inflation, which Republicans are forcefully doing. When questioned by a reporter on Sunday, Biden said the spending cuts he had proposed would not cause a recession.

A bill Republicans passed last month that pairs spending cuts with a debt limit increase would net about $5 trillion in savings over a decade compared to current projections.

The Republicans’ latest proposal includes a nominal drop in total discretionary spending next year. But that cut isn’t evenly distributed; in their plan, military spending would continue to rise, while other programs would face deeper cuts.

Biden’s offer would set spending limits for two years. Republicans would set them for six years.

Republicans have also proposed several money-saving efforts that White House officials have opposed. They include new work requirements for Medicaid recipients and the Temporary Assistance Program for Families in Need. They would also make it more difficult for states to seek work requirement waivers for some federal food assistance recipients living in areas of sustained high unemployment — a proposal that was not in the Republican debt limit bill that passed the House. .

Republicans are also continuing to seek a cut in enforcement funding for the IRS, a move that the Congressional Budget Office estimates would actually increase the budget deficit by decreasing future federal tax revenues. And they tried to include some provisions of a tough immigration bill recently passed by the House, according to a person familiar with the bill.

« We are all concerned about deficits and fiscal responsibility, but deficits can be addressed through both spending changes and revenue changes, » Ms. Yellen said, adding she was « very concerned » about Republican proposals to cut funding for the IRS

Republican leaders on Saturday continued to blame White House negotiators for what they called the deterioration in discussions.

« The White House is backing off on negotiations, » McCarthy wrote on Twitter. In a separate post, she blamed Mr. Biden for the impasse, saying the president « didn’t think there was a single dollar of savings to be found in the federal government’s budget. »

Mr. Biden insisted on Sunday that he was willing to cut spending. He also suggested that some Republicans were trying to crash the economy by not raising the loan limit, in order to damage Biden’s hopes of winning reelection.

If the nation were to default, Mr. Biden said, « I would be blameless » on the merits, meaning it would be the Republicans’ fault. But, he said, « on politics, nobody would be blameless. »

“I think there are some MAGA Republicans in the House who know the damage it would do to the economy, and because I am president, and the president is responsible for everything, Biden would take the blame,” he said.

Alan Rapport, Charles Hulse AND Chris Cameron contributed report.