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In Debt Limit Talks, Biden and Republicans Start Far Apart

President Biden welcomes House Speaker Kevin McCarthy and other congressional leaders to the White House on Tuesday for a pivotal discussion on America’s taxes, spending and debt as a catastrophic government default rapidly approaches. It’s a schedule.

The negotiations come just weeks before the US is expected to run out of cash to pay bills unless the country’s borrowing cap is lifted. Like previous brink moments, this debate echoes his 2011 and 2013. At this time, Republicans in Congress refused to raise the debt ceiling unless a Democratic president agreed to curb federal spending and reduce the budget deficit. The same dynamics are at work today, but with a crucial difference. The two parties share little in common over tax and spending proposals aimed at slowing the growth of the country’s $31.4 trillion national debt.

The meeting is not expected to yield anything near final agreement on a fiscal plan that could include raising the debt ceiling. But even the slightest point of consensus can be difficult to achieve.

Biden wants to increase federal spending and reduce future debt, mainly by raising taxes on high-income earners and big businesses. Republicans passed legislation that cuts federal discretionary spending, including on national parks and education, and reverses tax breaks on certain low-emission energy sources that were part of the climate change bill Biden signed into law. Republicans have pledged to extend the 2017 tax cuts approved by President Donald J. Trump, which are set to expire at the end of 2025.

Both sides say they want to reduce the country’s future debt burden, but there is little overlap in how to achieve that result. The only point of agreement so far is one point that Biden and McCarthy consider off-limits in budget negotiations. It is Social Security and Medicare, the major sources of projected federal spending growth in the coming decades.

Fiscal inequality is one of several factors complicating the debate over the debt ceiling. The official employs what is essentially an accounting manipulation to keep paying all of the government bills on time without exceeding his current $31.4 trillion limit. But Treasury Secretary Janet L. Yellen said in a letter last week that these efforts could start as early as June 1 at the risk of default, which economists warn could trigger a financial crisis and recession. He warned that one day it would be impossible.

Biden has refused to negotiate directly over the cap, saying Republicans must vote to raise the cap without conditions. But he invited McCarthy and other congressional leaders to the White House on Tuesday for what he called another round of negotiations on fiscal policy.

Republicans have said they won’t raise the cap unless spending is significantly curbed. This is the same position they took in 2011 and 2013 under President Barack Obama, for whom Biden was Vice President. When Trump took control of Congress at the beginning of his term and the Republican vote effectively helped raise the limits, they did not make similar demands for the limits to be raised.

In 2011, Mr. Obama entered into debt limit negotiations with the United States. set of proposed spending cutsThis included a five-year freeze on discretionary spending not related to national security, another two-year freeze on federal employee salaries, and the elimination of air-to-air missile programs and Marine Corps combat vehicles. rice field. Republicans have responded with a budget that features drastic cuts in federal health care costs, privatization of Medicare for future beneficiaries, and new tax cuts.

Republicans eventually agreed in exchange for a higher debt ceiling. budget change It was centered around a discretionary spending cap, essentially modifying and expanding the spending freeze that Obama proposed in the budget.

Unlike Mr. Obama more than a decade ago, Mr. Biden has never agreed with Republicans’ claims that federal spending is getting too big. He has proposed curtailing the increase in government debt, but his aides have rejected Republican claims that the current debt trajectory poses a significant threat to economic growth.

Biden’s most recent budget included $3 trillion in proposals to cut future deficits. Savings will come primarily from higher taxes on the wealthy and large corporations, and from lower government spending on health care by expanding Medicare’s ability to negotiate prescription drug prices.

Republicans rejected all tax increases and criticized Mr. Biden earlier this year for not proposing to spend more on the military than Mr. Biden has already done.

House Republicans have not submitted or passed the budget. The bill they passed last month would raise the debt limit by $1.5 trillion, or by March 2024, whichever comes first. He could cut future deficits by nearly $5 trillion, mostly by freezing certain federal spending for 10 years, according to the nonpartisan Congressional Budget Office.

It also included renewed support for fossil fuels, a rollback of Mr. Biden’s climate change policy, and an end to the president’s attempt to cancel most borrowers’ student loan debt, but the Supreme Court anyway likely to be rejected by

Neither side has found a favorite in the other’s starting position. Republicans “didn’t make a budget,” New York Rep. Hakeem Jeffries, the Democratic leader who will join Mr. McCarthy at the White House meeting, told NBC News on Sunday. “What they did was create a ransom note.”

Texas Rep. Jody C. Arlington, chairman of the budget committee, countered that Mr. Biden had to make concessions and negotiate with Republicans.

“As Vice President and as a Senator, Biden has negotiated a higher debt ceiling with common sense spending controls and fiscal reform,” Arrington told Fox News on Sunday. “And we’re just asking him to be a responsible leader and do it again.”

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