President Joe Biden urged House Republicans to change their position on debt ceiling discussions. He highlighted that their conditions alone could not result in an agreement to avoid a catastrophic default.
To restart the discussion, President Biden scheduled a conversation with Speaker of the House Kevin McCarthy after he returned from the Group of Seven summit in Japan. During the event, global leaders voiced alarm about the catastrophic global repercussions if the US fails to meet its financial commitments.
Joe Biden emphasized at a press conference that Republicans must face the fact that a bipartisan agreement could not be reached purely based on their party terms, CNBC reported. He recognized his attempts to increase the borrowing ceiling by proposing large budget cutbacks. Biden now expects the Republicans to soften their position on the debt ceiling issue.
Right now, Republican legislators are standing by their expectations for significant expenditure cuts and rejecting other deficit reduction plans proposed by the White House.
While President Biden was at the G7 conference in Japan, leading congressional Republican Kevin McCarthy accused the White House of regressing in discussions due to the Democratic Party's socialist wing.
White House spokesperson Karine Jean-Pierre said that the Republican leadership, not President Biden or Democratic leadership, threatens to put the United States into default with their extreme political demands, according to CNA.
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Notwithstanding the Biden administration's worry that millions of Americans may lose Medicaid coverage, Republicans demand work requirements. The GOP also limited the capacity of states to waive work requirements in high-unemployment regions by cutting food assistance.
GOP legislators also want the White House to embrace portions of their immigration plan and reduce IRS funding. In response, the White House has suggested maintaining both military and nondefense expenditures at their current levels for the next fiscal year, which would save $90 billion in the 2024 budget year and $1 trillion over a ten-year period.
Yellen Warns Major Banks
During a private conversation with key bankers, including Jamie Dimon, CEO of JP Morgan Chase, Treasury Secretary Janet Yellen emphasized the effects of a hypothetical debt limit default outside of the banking sector.
Yellen advised against last-minute deals and underlined the early June X-Date. To put pressure on congressional Republicans to increase the nation's $31.6 trillion debt limit before June, senior Biden officials are leading this initiative, per Axios.
Some Biden administration officials are somewhat dissatisfied that the business sector hasn't done more to convince Republicans to take measures to raise the debt limit.
However, it's unclear how much business organizations or the markets influence some of the US Congress' conservative legislators.
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