© Reuters. FILE PHOTO: The American flag flies over the U.S. Treasury building, after the U.S. government hit its $31.4 trillion borrowing limit amid a standoff between the Republican-controlled House of Representatives, President Joe Biden and Democratic legislator
By David Morgan
WASHINGTON (Reuters) – Republicans who control the U.S. House of Representatives are divided over how hard a line to take on the debt ceiling, but were united on Wednesday in demanding that Democratic President Joe Biden agree to negotiate on spending as part of any deal.
Hard-line Republican conservatives, who have the power to block any deal in the narrowly divided House, want to force deep spending cuts on Biden and the Democratic-led Senate in exchange for an agreement to avoid default on the $31.4 trillion debt.
Some moderates want to tread more carefully and avoid any potential damage to the U.S. economy, but even they contend their party will not support a debt agreement without negotiations on spending.
“I know we can’t ask for the moon,” said Representative Don Bacon, a moderate Republican whose Nebraska district Biden won by 6 percentage points in 2020.
“But the president also can’t refuse to negotiate. I mean, if he refuses to negotiate, you’re not going to get any Republican support for anything,” Bacon told Reuters.
The federal government on Jan. 19 came close to its $31.4 trillion borrowing limit set by Congress, and the Treasury Department has warned that it may only be able to pay all the government’s bills through early June, at which point the world’s biggest economy could be at risk of failing to meet its obligations, including on its debt securities.
Brinkmanship could panic investors, potentially sending markets slumping and shaking the global economy. A downgrade of the United States’ debt could result — as occurred in protracted 2011 debt-ceiling battle that also led to years of forced domestic and military spending cuts.
Congress raised the debt limit three times during Republican Donald Trump’s presidency. But Republicans are now seizing the issue as leverage in their first major act since winning a narrow 222-212 House majority.
House Speaker Kevin McCarthy and Biden are expected to meet and discuss the debt ceiling among other issues. But no meeting has yet been scheduled. The White House has repeatedly rejected the idea of negotiating over spending levels to secure an agreement on the debt ceiling.
SENATE STANDS BACK