Biden threatens to default, to pressure McCarthy to threaten spending cuts
In a note to stakeholders, Brian Deese, director of the National Economic Council, and Shalanda Young, director of the Office of Management and Budget, said Biden would question McCarthy in two areas:
- If he “holds to the fundamental principle that the United States will never default on its financial obligations” and if he agrees that “it is important to avoid the debt ceiling.”
- Will Republicans release a budget “so the American people can see how House Republicans plan to reduce the deficit”? The memo says Biden will release his budget on March 9.
The memo represents an attempt by the White House to set the agenda and put McCarthy on the defensive ahead of the meeting he requested.
“Any serious conversation about economic and fiscal policy must begin with a clear understanding of the goals and proposals of the participants,” Dees and Young wrote in the memo. “President McCarthy and his team must openly present their fiscal and economic proposals to the American people through the normal budget process.”
In the memo, Dees and Young try to make McCarthy appear out of line with other national leaders of both parties, including Senate Minority Leader Mitch McConnell (R-Ky.), who has been cited as one of the most important. The United States has said it is meeting its financial obligations and that Republican Presidents Trump and Ronald Reagan are trying to avoid tougher policies on the issue.
McCarthy said Social Security and Medicare are “inappropriate” for spending cuts, but all other programs, including money for the military, should be scrutinized for spending cuts.
However, some GOP members have raised the possibility of cuts to two basic entitlement programs. Majority Leader Charles E. The effort is sure to fail in the Democratic-led Senate, where Schumer (DN.Y.) has rejected the idea.
Earlier this month, the Treasury Department launched “emergency measures” to pay the country’s bills after reaching a limit on how much it can borrow. The government is expected to continue working in this way until June.
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