President Biden is set to welcome Speaker Kevin McCarthy and other top congressional leaders to the White House on Tuesday for a key round of discussions on taxes, spending and the national debt as a potential catastrophic government default fast approaching.
The talks come just weeks before the United States is expected to run out of cash to pay its bills unless the country’s borrowing is written off. Like previous moments of brinkmanship, the discussions have echoes of 2011 and 2013, when congressional Republicans refused to raise the debt ceiling unless a Democratic president agreed to curb federal spending and reduce the budget deficit. The same dynamic is at play now, but with a key difference: The parties have virtually no common ground on tax and spending proposals intended to reduce the growth of the nation’s $31.4 trillion debt.
The meeting is not expected to produce anything close to a final agreement on a fiscal plan that could include raising the debt limit. But even small points of consensus can be hard to come by.
Mr. Biden wants to expand federal spending and reduce the future debt, largely by raising taxes on high incomes and large companies. Republicans passed a bill to cut federal discretionary spending — a category that includes national parks, education and others — and cancel tax breaks for some low-energy sources. emissions part of Mr. Biden’s climate legislation. Republicans have promised to extend the 2017 tax cuts approved by President Donald J. Trump and set to expire at the end of 2025.
While both sides say they want to reduce the country’s debt burden, there is almost no overlap in how they intend to achieve that outcome. The only point of agreement so far is something Mr. Biden and Mr. McCarthy no limits on budget talks: Social Security and Medicare, the main sources of expected growth in federal spending in the coming decades.
The abyss of financial issues is one of the many factors complicating the discussions about the debt limit, which the government technically hit earlier this year. Officials are using what are essentially accounting maneuvers to keep paying all government bills on time without exceeding the current $31.4 trillion limit. But Janet L. Yellen, the Treasury secretary, warned in a letter last week that those efforts would not be possible as soon as June 1, risking a debt default that economists warned could trigger in a financial crisis and recession.
Mr. Biden refused to negotiate directly on the limit, saying that Republicans should vote to raise it without conditions, because it only allows the government to pay for spending that has already been approved by lawmakers in both party. But he invited Mr. McCarthy and other congressional leaders will go to the White House on Tuesday for what he calls a separate negotiation on fiscal policy — though it is effectively intertwined with the debt limit drama.
However, White House officials said this weekend that Mr. Biden was publicly and privately adamant that he would not negotiate with Republicans on raising the limit. “Let’s get it right: They’re trying to hold the debt hostage to get us to agree to some draconian cuts, very tough and devastating cuts,” Mr. Biden told a meeting of members of the cabinet and other economic officials on Friday.
Republicans have said they won’t raise the limit without significant spending curbs. On Monday, 43 Republican senators sent a letter to Senator Chuck Schumer of New York, the majority leader, warning that “we will not vote for cloture on any bill that raises the debt ceiling without’ y more spending and budget reforms.” That is a large enough group to block a vote on such a bill.
Republicans took the same position in 2011 and 2013, under President Barack Obama, when Mr. Biden was vice president. They did not make similar requests to raise the limit when they controlled Congress at the start of Mr. Trump’s term and Republican votes helped effectively raise the limit.
In 2011, Mr. Obama entered the debt limit negotiations with a set of proposed spending cuts. They include a five-year freeze on discretionary spending unrelated to national security, a separate freeze on federal workers’ pay for two years and the elimination of a program of air-to-air missile and a combat vehicle for the Marine Corps. Republicans are fighting a budget that features deep cuts in federal health care spending, privatizing Medicare for future beneficiaries and new tax cuts.
Republicans ultimately agreed to raise the debt limit in exchange for budget changes centered on caps on discretionary spending — essentially revising and expanding the spending freeze proposed by Mr. Obama on his budget.
Unlike Mr. Obama more than a decade ago, Mr. Biden never agreed with the Republicans’ argument that federal spending has grown too much. He has proposed reducing the growth of the government’s debt, but his aides have rejected Republican contentions that the current path of debt poses a significant threat to economic growth.
Mr. Biden’s latest budget includes $3 trillion in proposals to reduce future deficits. The savings will come largely from tax increases on the wealthy and large corporations, along with cutting government spending on health care by expanding Medicare’s ability to negotiate prescription drug prices.
Republicans have rejected all tax increases and criticized Mr. Biden earlier this year for not proposing to spend more on the military than he already has.
House Republicans have not tabled or passed a budget. The bill they passed last month would raise the debt limit by $1.5 trillion or until March 2024, whichever comes first. It would reduce future deficits by nearly $5 trillion, largely by freezing some federal spending for a decade, according to the nonpartisan Congressional Budget Office.
It also includes new supports for fossil fuels, a rollback of Mr. Biden’s climate change agenda and an end to the president’s attempt to cancel student loan debt for most of the borrowers, who are likely to be struck down by the Supreme Court regardless.
Couldn’t find any part that wanted another start position. Republicans “didn’t do a budget,” Representative Hakeem Jeffries of New York, the Democratic leader, who will join Mr. McCarthy at the White House meeting, told NBC News on Sunday. “What they did was create a ransom note.”
Representative Jodey C. Arrington of Texas, the chairman of the Budget Committee, argued that Mr. Biden should concede and negotiate with Republicans.
Mr. Biden “negotiated, as vice president and as a senator, an increase in the debt ceiling, with spending controls and fiscal reforms,” Mr. Arrington told Fox News on Sunday. “And we’re just asking him to be a responsible leader and do that again.”
