WASHINGTON, Jan 15 (Reuters) – House Speaker Kevin McCarthy said on Sunday he believed Democrats would agree to impose a ceiling on government spending to avoid a U.S. debt default, and he wanted to discuss the idea with President Joe Biden.
Republicans, who now control the House of Representatives, have threatened to use the debt ceiling as leverage to demand spending cuts from Biden’s Democrats, who control the US Senate.
That has raised fears in Washington and on Wall Street of a bitter battle that could be at least as destructive as the protracted 2011 battle that prompted a brief downgrade of the U.S. credit rating and years of forced domestic and military spending cuts.
“I want to sit down with him now so there’s no problem,” McCarthy said in an interview with Fox News, referring to Biden. “I’m sure he knows there are places we can change that put America on a trajectory where we save those rights instead of bankrupting it like they’ve been spending so far.”
McCarthy pointed to the Trump-era agreement by US lawmakers in 2019 to suspend the statutory debt limit for Treasury borrowing until a later date as evidence that such a compromise is possible.
“I believe we can sit down with anyone who wants to work together. I believe this president can be that person,” he said.
House Oversight Committee Chairman James Comer said Sunday he hoped a default could be avoided, but put the onus on Democrats to agree to spending cuts.
“Republicans were elected with a mandate by the American people in the midterm elections. We ran a campaign on the premise that we were going to be serious about spending cuts,” Comer said in an interview on CNN’s “State of the Union.”
“So the Senate is going to have to recognize the fact that we’re not going to budge until we see meaningful spending reform.”
U.S. Treasury Secretary Janet Yellen said Friday that the United States is likely to reach the legal debt limit of $31.4 trillion on Jan. 19, forcing the Treasury Department to initiate emergency cash management measures that could possibly prevent default by early June.
Congress created the debt ceiling in 1917 to give the government more flexibility in borrowing, and must approve any increase to ensure the United States meets its debt obligations and avoids catastrophic bankruptcy.
Reporting by Doina Chiaku and Kathryn Jackson; Editing by Lisa Shoemaker and Grant McCool
Our standards: The Thomson Reuters Trust Principles.
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