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WASHINGTON – President Joe Biden on Monday summoned House Speaker Kevin McCarthy and other congressional leaders to the White House for urgent talks next week on avoiding a default on the nation’s debt.
Biden’s call to McCarthy, who is traveling in Israel, came about an hour after Treasury Secretary Janet Yellen warned the federal government may not be able to pay its bills as soon as June 1.
Biden has been under pressure to talk to McCarthy after House Republicans passed a bill to raise the debt limit while cutting spending.
Maintaining his position that the debt limit be raised without conditions, Biden will stress the urgency of acting as well as discuss how the White House can deal separately with House Republicans on future spending decisions, according to a White House official.
The Biden administration and the GOP-controlled House have been in a standoff over the impending deadline.
House Republicans insist they won’t raise the borrowing limit unless Democrats agree to spending cuts. McCarthy’s proposal would curtail spending growth and impose policy changes that include eliminating Biden’s student loan forgiveness plan and adding new work requirements for some people who receive food assistance and health coverage.
“We passed a bill to address the problem,” House Majority Leader Steve Scalise, R-La., said on ABC’s “This Week with George Stephanopolous” Sunday. “It’s time now for the president to get in this game.”
Biden insists future spending decisions be negotiated separately – and the debt limit be increased without conditions as it has been under past presidents, including Donald Trump.
“We pay our bills, and we should do so without reckless hostage-taking from some of the MAGA Republicans in Congress,” Biden said Monday.
The amount the government can borrow is currently capped at $31.4 trillion.
After hitting that limit in January, the Treasury Department has been using “extraordinary measures” to pay its bills. Officials initially said they might run out of options by early June.
On Monday, Yellen told congressional leaders her latest “best estimate” is that could happen by June 1, though it could also be “a number of weeks later.” She said she will continue to update Congress as more information becomes available.
But she called it “imperative that Congress act as soon as possible to increase or suspend the debt limit in a way that provides longer-term certainty that the government will continue to make its payments.”
Separately, the nonpartisan Congressional Budget Office, updated its forecast to warn of a “significantly greater risk” that the Treasury will run out of funds in early June. The agency had previously estimated that could happen sometime between July and September.
The forecast changed, CBO Director Phillip Swagel said in a statement Monday, because taxes collected through April were less than the CBO had projected in February.
If the government defaults on its debt – something the U.S. has never done – financial markets could tank, hurting 401(k)s and other investments. A debt ceiling standoff in 2013 cost the economy 1% in GDP.
Since 1960, Congress has acted 78 times to permanently raise, temporarily extend, or revise the definition of the debt limit – 49 times under Republican presidents and 29 times under Democratic presidents, according to the Treasury Department.
Maureen Groppe is a White House correspondent for USA TODAY. Follow her on Twitter @mgroppe.
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