Posted on 05/21/2023 8:30:36 PM PDT by SeekAndFind
It’s back, it’s forth, debt ceilings negotiations are on, they’re off—the discussions between House Speaker Kevin McCarthy and President Joe Biden are a constantly changing drama. After they both issued contentious statements Saturday, McCarthy on Sunday said he had spoken to the president by phone as Biden returned from the G7 summit on Air Force One.
Both sides have been accusing the other of being intractable in negotiations over raising the debt ceiling, which Treasury Secretary Janet Yellen says we could hit as soon as June 1, causing “economic chaos.”
Evidently, they’re on slightly friendlier terms after the phone call, and they’ve agreed to meet at the White House Monday.
“My discussion with the President I think was productive,” McCarthy told NBC News after their call, adding that the president had requested to meet in person Monday and he accepted the offer.
“I think we can solve some of these problems. But I’ve been very clear to him from the very beginning, we have to spend less money than we spent last year.”
Just got off the phone with the president while he’s out of the country.
My position has not changed. Washington cannot continue to spend money we do not have at the expense of children and grandchildren.
Tomorrow, he and I will meet in person to continue negotiations.
— Kevin McCarthy (@SpeakerMcCarthy) May 21, 2023
Their respective staffs met Sunday night in advance of the talks:
A White House official confirmed the upcoming Monday meeting at the White House between Biden and McCarthy and said that their staffs will also reconvene at 6 p.m. Sunday evening to discuss remaining issues.
Yellen appeared on “This Week” with George Stephanopolous on May 7 to warn that the country could literally run out of money by early June if a deal was not struck. On Sunday, she went on on “Meet the Press” to reiterate her concerns:
“I indicated in my last letter to Congress that we expect to be unable to pay all of our bills in early June and possibly as soon as June 1. And I will continue to update Congress, but I certainly haven’t changed my assessment,” Yellen said. “So I think that that’s a hard deadline.”
Earlier Sunday, before the phone call, the two sides sounded as if they were far apart:
Republicans have been seeking spending cuts in the federal budget in exchange for their support to raise the nation’s borrowing limit. On Sunday, Biden acknowledged “significant” disagreement with Republicans in some areas, insisting that while he’s willing to cut spending, tax “revenue is not off the table” as part of the deal.
McCarthy, in an interview Sunday with Fox News, disagreed with that characterization, saying Biden previously told him that tax increases were “off the table” and that he wouldn’t agree to them.
“He’s now bringing something to the table that everyone said was off the table,” the California Republican said. “It seems as though he wants to fault more than he wants a deal.”
Expect this thing to go down to the wire, as neither side looks like they’re close to giving the other what they want. In some ways, it can be pretty easily summarized: Biden and the Democrats want to continue spending like drunken sailors, McCarthy and the Republicans argue that they will only agree to a debt ceiling increase in exchange for spending cuts. Obviously, there are other disagreements, but that’s the crux of the matter.
The nation has never defaulted on its debt before, so economists can’t tell us precisely what would unfold. That being said, it certainly wouldn’t be a good thing for America:
The far-reaching effects are hard to fully predict: from shock waves in financial markets to bankruptcies, recession and potentially irreversible damage to the nation’s long-held role at the center of the global economy…
But as the day approaches when the United States begins to run out of cash to pay its bills — which could be as soon as June 1 — investors, executives and economists around the world are gaming out what might happen immediately before, during and after, hatching contingency plans and puzzling over largely untested rules and procedures.
“We are sailing into uncharted waters,” said Andy Sparks, head of portfolio management research at MSCI, which creates indexes that track a wide range of financial assets, including in the Treasury market.
It’s getting close to nail-biting time.
See also:
Brutal New AP-NORC Polling Destroys Democrat Narrative on the Debt Ceiling Fight
House Speaker Kevin McCarthy’s Popularity Has Surged Since January
These worthless Aholes have to make this so dramatic. What a bunch of losers we have running our country.
Kabooki theater. A last minute deal will miraculously appear, then back to spending like a drunken sailor.
Why doesn’t anybody ask the media why the democrats failed to pass the debt ceiling in December? Republicans are awful at messaging.
The majority of republicans are sniveling cowards and traitors. You’d need a Biblical plague to rid us from their treasonous grip over the country. They’ve held us back and allowed the destruction of this country by the democrats, over and over again.
Joetato is trying to play McCarthy for a fool.
If McCarthy lets that dementia patient do that it will happen on every issue.
We’ve all seen this movie before. We know the ending. 🙄
Probably why Biden agreed to meet. He always gets interested if children and grandchildren are involved.
The bottom line is that the Treasury is running low on liquid assets to pay bills. Nothing more. The incoming revenue stream has not stopped, but it's not coming in fast enough to cover all the upcoming obligations to agreed-to timelines. The debt ceiling simply disallows the Treasury people to refill the cash balance by incurring more debt.
So it's not that the USA will stop paying its bills. It will be late paying some bills, assuming the debt ceiling isn't raised. Just like families are late paying their credit card company the entire statement balance when money from paychecks and investments don't arrive fast enough to meet the deadlines and all the credit cards &c are maxed out.
What late payments to the USA's creditors does is erode the trust of the people being paid from the Treasury. When the USA shows it doesn't pay all its bills on time, the credit rating agencies will take note of this and lower the USA's credit score, just like the credit reporting agencies lower the family's credit score when the financial head doesn't take appropriate steps to reduce the family debt load. That scenario is what has Janet quaking in her boots.
With understandable reason. When the USA's credit score goes down, the cost of borrowing money goes up. It's already happening. Look at the interest rate of four-week Treasury bonds.
The BribeThem Administration is engaging in FUD, instead of buckling down and doing what it asks of the masters of finance around millions of kitchen tables, from sea to shining sea.
We should all expect the RINOs to fold.....again.
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