(Washington) As an American default threatens, Joe Biden tries again on Monday to find a compromise with Kevin McCarthy, his main opponent in a showdown as much political as budgetary.
The two men, who have already seen each other twice in two weeks with other parliamentary leaders, this time have a one-on-one meeting at 5:30 p.m. local time.
Their teams have already resumed talks that had frankly turned sour over the weekend.
It took a telephone conversation on Sunday between the American president and the Republican boss of the House of Representatives to resolve the situation somewhat.
Kevin McCarthy called the exchange “productive”, according to American media, and Joe Biden launched that it had “gone well”, returning Sunday evening to the White House after a G7 Summit in Japan.
The 80-year-old Democrat had originally planned to extend his diplomatic tour of Oceania, to assert the American presence in the face of Chinese ambitions, but the political-budgetary imbroglio in Washington forced him to abandon this segment of the trip.
To remove the risk of bankruptcy, Congress – the Senate held by the Democrats and the House with a Republican majority – must vote to raise the maximum ceiling on authorized public debt. This parliamentary procedure, long routine, has already given rise to extremely politicized battles under the Obama presidency.
This time the Republicans require, to give their green light, a sharp reduction in public spending. Joe Biden, who is campaigning for re-election in 2024 on a social justice pledge, opposes it.
The conservative camp accuses the White House of being too spendthrift. The presidential party for its part castigates a republican project which would finance tax gifts to the rich by strangling the working classes.
Republicans and Democrats, on the other hand, are in unison on one thing: it is the opposing camp that is holding the country “hostage” with the risk of bankruptcy.
“Washington can’t keep spending money we don’t have,” Kevin McCarthy tweeted.
The American president warned him that he would refuse any agreement that would “endanger the health care of 21 million Americans” or “food aid” for the most precarious.
If no agreement is reached, an unprecedented default, with potentially catastrophic consequences for the American and global economy, could occur after June 1.
The “debt ceiling” of more than $31 trillion—a world record—was reached several months ago, but the federal government has so far managed the situation through accounting arbitrations.
In the event of default, the United States would no longer be able to repay holders of Treasury bills, this king of global finance investments. The government would also no longer be able to pay certain salaries of civil servants, nor pensions of veterans, among others.
The left wing of the Democratic Party is pushing Joe Biden to force his way through by invoking the 14th Amendment to the American Constitution, which prohibits “questioning” the solvency of the first world power.
In this case the government would issue new loans, as if the debt ceiling did not exist.
Joe Biden is studying this possibility, fraught with legal dangers, especially when one faces like him a Supreme Court firmly anchored on the right.