'On the clock': McCarthy urges Biden to restart talks on debt ceiling as default looms

WASHINGTON – House Speaker Kevin McCarthy is asking President Joe Biden to restart negotiations on raising the United States' borrowing limit as the country creeps toward a potential default.

"With each passing day, I am incredibly concerned that you are putting an already fragile economy in jeopardy by insisting upon your extreme position of refusing to negotiate any meaningful changes to out-of-control government spending alongside an increase of the debt limit," McCarthy wrote in the letter sent Tuesday.

The debt ceiling is the maximum amount the U.S. government can spend on its existing obligations, including Social Security and military salaries. Treasury Secretary Janet Yellen notified Congress in January that the U.S. could default on its debt as soon as June.

Biden responded in a letter released late Tuesday that he looks forward to talking to the speaker about the nation's economic and fiscal future. "But for that conversation to be productive," he said, "we should both tell the American people what we are for."

Biden urged House Republicans to release their proposed budget before Congress leaves for Easter recess "so that we can have an in-depth conversation when you return."

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The White House has said that before it will negotiate the debt ceiling, the GOP needs to release its counterproposal to the Biden administration's budget proposal, which it released earlier this month.

"It’s time for Republicans to stop playing games, agree to a pass a clean debt ceiling bill, and quit threatening to wreak havoc on our economy. And if they want to have a conversation about our nation’s economic and fiscal future, it’s time for them to put out a Budget – as the President has done with his detailed plan to grow the economy, lower costs, and reduce the deficit by nearly $3 trillion," White House press secretary Karine Jean-Pierre said in a statement.

What proposals are on the table?

In his letter, McCarthy, a California Republican, suggested cutting "excessive" nondefense government spending, reclaiming unspent COVID-19 money and strengthening work requirements for social programs as ways to curb spending.

House Republicans have not yet released a unified plan on how to raise the the debt limit, though factions of the party have raised suggestions.

An initial proposal from the House Budget Committee includes cuts to the Environmental Protection Agency, Biden's student debt cancellation and funding for electric vehicles for the U.S. Postal Service.

The House Freedom Caucus' proposal includes $131 billion in cuts for fiscal year 2024. The cuts would end Biden's student loan forgiveness plan and reclaim "wasteful climate change spending." It would save $3 trillion in the long term by cutting federal bureaucracy, according to a statement from the caucus.

Why would a default matter?

If the federal government defaults on its payments, Americans could see consequences like a stock market crash, a recession and a rise in unemployment, experts have told USA TODAY.

"Mr. President, simply put: you are on the clock," McCarthy said in the letter.

Asked by reporters traveling with him in North Carolina if he planned to meet with McCarthy, Biden responded: "I don't know what we're going to meet on . . . The deal was we each put down our budget."

Contributing: Michael Collins

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This article originally appeared on USA TODAY: McCarthy asks Biden to restart talks on debt ceiling in letter