Biden will speak to McCarthy, warns US default would be ‘calamity’

PRESIDENT Joe Biden said he would discuss the debt limit with Republican House Speaker Kevin McCarthy and raise the issue in his State of the Union, saying it would be a financial “calamity” if the US defaults on its obligations.

“If we don’t meet our national debt and renege for the first time, we have a calamity that exceeds anything that’s ever happened financially in the United States,” Biden said Friday (Jan 20) at the White House after a meeting with a bipartisan group of mayors. 

“The debt we’re paying on – and we’re going to have a little discussion about that with the new majority leader of the House – has accumulated over 200 years,” the president said.

McCarthy in a tweet Friday said he accepted the president’s invitation to discuss the debt ceiling. 

“I accept your invitation to sit down and discuss a responsible debt ceiling increase to address irresponsible government spending. I look forward to our meeting,” McCarthy tweeted.

The president did not elaborate on when a sit-down with McCarthy might occur. The president usually meets with congressional leadership at the start of a new Congress, but no such session is on the books yet. 

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Biden also said he would discuss the national debt and his fiscal 2024 budget proposal during his Feb. 7 State of the Union address. 

Biden spoke during a meeting with mayors from across the country, one day after Treasury Secretary Janet Yellen said the federal debt limit had been reached and her department had begun using special measures to avoid a US payments default.

Last week, Yellen said the steps wouldn’t likely be exhausted before early June.

Republicans who control the House as aim to use the debt ceiling as leverage to extract deep spending cuts from the White House and Democrats.

Biden has insisted he will not negotiate over boosting the limit, asking Congress to raise it without conditions because US credit is too important to haggle over. 

“Now the big debate, and I’ll be honest with you, and I’m going to talk about it in the State of the Union, is a fundamental disagreement on what we should do to cut,” Biden said Friday.

“It’s not just cutting. What do you raise? What taxes do people pay? How do they pay their taxes, and do they pay it fairly?” BLOOMBERG