(Washington) As the countdown ticks away before a possible bankruptcy of the United States, the teams of Joe Biden and the negotiators of the Republican camp have again sought Tuesday, without immediate success, a delicate budgetary compromise.
“Each side needs to understand that they won’t get everything they want. We are trying to come up with a budget that is reasonable and supported by both parties,” White House spokeswoman Karine Jean-Pierre said.
She said Republican and Democratic negotiators, after already working until late Monday evening, met again for several hours on Tuesday, and indicated that Joe Biden would be informed of the status of the discussions.
Even if time is running out before June 1, when an unprecedented and perilous American default could occur, the executive does not intend to force its way by invoking the 14th Amendment to the Constitution.
This text prohibits “questioning” the solvency of the world’s leading power.
“It wouldn’t solve the problem we have right now,” she said of the strategy the US president recently mentioned.
It would consist in issuing new loans without worrying about the “debt ceiling”, which is the subject of all the discussions of the moment. Congress absolutely must increase it quickly to avoid bankruptcy, which the US Treasury says could happen in nine days.
The federal government would then find itself more or less quickly unable to pay certain civil servants, to pay certain social benefits, and to reimburse certain creditors.
The result, economists say, would be financial panic and a massive recession, with a global contagion effect.
To vote in favor of a higher debt ceiling – it is currently over 31 trillion dollars – Republicans are demanding a budgetary effort.
The Democrats led by Joe Biden are also in favor of reducing the deficit.
Problem: Each side has opposing ideas on how to achieve this.
The White House would like to tax the wealthiest and big business more, without touching social benefits or the president’s huge investment projects. In other words, to increase the revenues of the federal state.
The Conservatives, on the other hand, would rather cut public spending.
Republican House boss Kevin McCarthy, who is the White House’s main opponent on the file, said Tuesday that the Conservatives were “the only ones who did something” to avoid a default, presenting a strict budgetary plan.
The compromise, according to the American press, could be found on a few targeted budget items, in a reallocation of funds intended to fight the COVID-19 pandemic, and via a freeze on certain expenses, the duration of which is fiercely debated.
Time is running out all the more because it is not just a question, for Joe Biden and Kevin McCarthy, of reaching an agreement between them. The compromise found will still have to be validated by Congress.
Democrats control the Senate by only a short head, while Republicans have only a few majority seats in the House.
However, the progressive senators on the Democratic side, and the elected Trumpists on the Republican side, have already given voice to demand the greatest firmness from their respective leaders.
A default could change the face of the 2024 presidential campaign.
Joe Biden, who at 80 is seeking re-election, is struggling to excite public opinion with his promises of prosperity and social justice. A recession would weigh down his candidacy.
Former President Donald Trump, favorite in the Republican primary, for his part calls on his camp not to “bend” in the face of the White House in the debt file.
