Kevin McCarthy Puts Debt Ceiling Pressure on Biden, Democrats

The national debt talks between Democratic President Joe Biden, Republican House Speaker Kevin McCarthy and other congressional leaders on Tuesday ended in a stalemate, with the Republican saying he "didn't see any new movement" in negotiations as the deadline looms.

Democrats and Republicans have been disputing their terms of a deal to avert a federal financial crisis as the clock ticks down to the June 1 deadline, the date Treasury Secretary Janet Yellen has said the federal government will default if the debt ceiling isn't raised. However, with the debt totaling over $31.5 trillion, many members of the GOP-dominated House of Representatives argue that raising the debt ceiling without budget cuts would be irresponsible.

Tuesday's meeting comes after numerous debates and proposals, including a bill House Republicans passed last month on a party-line vote that would raise the debt ceiling but also slash federal spending, including cuts to some of Biden's health and climate programs. Amid the partisan standoff, a growing number of senators from both parties have also been discussing the possibility of Biden invoking a clause in the 14th Amendment that some legal scholars say allows the president to raise the debt ceiling without congressional approval.

Newsweek has reached out via email and phone to representatives for Biden and McCarthy.

McCarthy criticized the president, saying he met with him months ago to discuss ways to avoid defaulting on the national debt and said Biden has "ignored the crisis."

"My position is clear and reasonable; House Republicans have done their job to avoid a default and responsibly raise the debt limit. Democrats must now do the same," McCarthy said in a press conference after the White House meeting.

McCarthy said he asked Biden "numerous times if there were places we could find savings," and he said the president didn't offer any.

Biden and the Democratic leadership have held firm in their refusal to tie a debt ceiling increase to federal spending, insisting that Congress act without preconditions as it has done in the past, where members voted to increase the debt limit dozens of times in the last several decades without cutting federal funding.

Americans agree, according to a poll last week, which found that 58 percent sided with Biden's position that debt payment and federal spending cuts shouldn't be packaged together. Only 26 percent agreed with the Republicans' plan to raise the debt ceiling only if it accompanies spending cuts.

If no deal is finalized and the debt limit is not raised, Americans will face the fallout. Interest rates would go up, the U.S. economy would likely slip into a recession, and a global financial crisis could ensue. A default would also lead to a government shutdown, with some nonessential services put on hold.

A default would push the economy right over the edge," Dan North, senior economist at Allianz Trade North America, told Newsweek. "Neither side wants to be seen as the party that created the default. Both sides are digging their heels in."

Despite the leaders being unable to compromise Tuesday, GOP Senate Minority Leader Mitch McConnell was confident the U.S. would not default. The lawmakers meet again Friday to continue negotiations.

"The United States is not going to default. It never has and it never will," McConnell said during a press conference following Tuesday's meeting.