(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 American president assured, when receiving the boss of the House of Representatives in the Oval Office, that he was “optimistic” about the possibility of a “breakthrough” at the end of the meeting.
“We can find common ground,” said Kevin McCarthy, in a short speech to the journalists present.
Treasury Secretary Janet Yellen recalled the stakes of the meeting well, emphasizing on Monday, once again, that it was “very likely” that the United States would find themselves short of public money after June 1.
The two men, who have already seen each other twice in two weeks with other parliamentary leaders, meet face-to-face this time.
This summit meeting is supposed to relaunch the discussions at the level of the teams of advisers, which had frankly turned sour this weekend, in the absence of Joe Biden.
The 80-year-old Democrat, who returned from the G7 Summit in Japan on Sunday, had originally planned to extend his diplomatic tour of Oceania, but the political-budget imbroglio in Washington forced him to cut short his 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 authorized public debt ceiling.
Interviewed on CNN before the meeting, Kevin McCarthy wanted to be rather optimistic, assuring that “what we have negotiated will be seen by a majority of Republicans as the right solution to get us back on the right track”.
The US president told him on Monday that while he was in favor of deficit reduction, it was necessary to “address the tax loopholes and ensure that the rich pay their fair share” of taxes.
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 consequences for the US and global economy would be catastrophic, warn many economists.
So who will give in first? The American president, who knows well that a recession, whatever its political genesis, would jeopardize his chances of re-election? Or Kevin McCarthy, whose position depends on a handful of elected radicals, who call on him – like former President Donald Trump – not to “bend”?
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.
However, this strategy is fraught with legal dangers, especially when one faces like Joe Biden a Supreme Court firmly anchored on the right.
