Is averting a U.S. debt default still possible? Treasury Secretary Janet Yellen predicted a shorter countdown to a possible catastrophic default.
President Biden is to meet with House Speaker Kevin McCarthy (R-Calif.) next Tuesday, but there are still seemingly irreconcilable — negotiating positions.
“If you need to hear again that it’s your responsibility to address the debt ceiling without conditions and a ransom, then he can say that again,” a senior Biden administration official told Politico about the upcoming meeting.
“President Biden has refused to do his job — threatening to bumble our nation into its first-ever default — and the clock is ticking,” McCarthy said in response to Yellen’s warning that the U.S. may be unable to pay its bills “potentially as early as June 1.”
The New York Times reports that top Biden officials are privately debating invoking the 14th Amendment, which some legal scholars say requires the federal government to pay its debts.
This will of course have legal challenges — and could spook the markets.
Yellen previously has characterized invoking the 14th Amendment or minting a trillion-dollar coin as unserious options — but that may be better than the economy defaulting on its debt.
House Democrats have been working on a “discharge petition” that could force a clean debt-ceiling hike to be brought to the floor with 218 votes — meaning all Democrats and five Republicans.
Some Senate Republicans have reluctantly expressed openness to a 30-day debt limit extension, an acknowledgment that a deal is highly unlikely to materialize in the next month. Members of leadership are opposed to kicking the can down the road.
“If everybody starts thinking we can get an extension, then the crisis won’t happen until the end of that extension,” Sen. Thom Tillis (R-N.C.).