Time for daily talks between Biden, Republicans on debt, moderate Democrat says

[April 29, 2023]  By David Morgan

WASHINGTON (Reuters) - A prominent moderate U.S. House of Representatives Democrat said Friday that it is time for President Joe Biden to begin daily talks with Republicans on government spending and debt, to avoid a calamitous default.

Representative Josh Gottheimer rejected Republican demands to raise the $31.4 trillion debt ceiling only in exchange for deep spending cuts. But he joined a growing number of moderates in Biden's party who say spending, deficits and the government borrowing limit should be part of a larger conversation about the nation's fiscal health.

"It's critically important that all the parties sit down at the White House with the president and start having these conversations. And they should meet every single day until they get there, together," said Gottheimer, who co-chairs the Problem Solvers Caucus of moderate Democrats and Republicans.

Similar calls have come from Senators Joe Manchin and Amy Klobuchar, and from House Democrats including Debbie Dingell, Jared Moskowitz and Greg Landsman.

The White House says that it will not negotiate on raising the debt ceiling, a move necessary to cover the costs of spending and tax cuts previously approved by Congress.

Since a Feb. 1 Oval Office sit-down, Biden and Republican House Speaker Kevin McCarthy have not met to discuss the issue, as the days count down to the time when the U.S. government will no longer be able to meet its financial obligations.

"Happy to meet with McCarthy. But not on whether or not the debt limit gets extended. That's not negotiable," Biden said on Wednesday, the day House Republicans narrowly passed their own legislation this week to lift the debt ceiling in exchange for sharp spending cuts.

That bill has no chance of passing the Democratic-controlled Senate and even if it did, Biden has said he would veto it.

U.S. Representative Josh Gottheimer (D-NJ) talks to reporters outside the U.S. Capitol in Washington, U.S., November 4, 2021. REUTERS/Elizabeth Frantz

Gottheimer said it doesn't matter whether the debt ceiling is considered together with spending and deficits or looked at separately. "What matters is that you actually sit down and have the conversations, and do it now," he told reporters. "What's unacceptable is going off a fiscal cliff."

The U.S. Treasury Department has warned that it could run out of the means to pay all its bills as early as June, at which point the federal government would default unless the debt ceiling was raised.

Default would cripple the U.S. economy. But even a prolonged debt-ceiling standoff could prove costly, as it did in 2011 when U.S. government saw its credit rating downgraded, pushing borrowing costs higher and hammering stocks.

Uncertainty is already taking its toll on financial markets, as investors await additional guidance on the default "X-date" from the Treasury.

With the House out until May 9, Congress would have only weeks to act on the debt ceiling if new guidance confirms an early June X-date.

A vote to avoid default by lifting the debt ceiling for just a few weeks could prove difficult in the narrowly divided House, where hardline conservatives have the power to block legislation and say they would demand spending cuts even then.

"A shorter-term extension still comes with a price tag," said Representative Chip Roy, a leading hardliner. "We're going to demand change."

(Reporting by David Morgan; Editing by Scott Malone and Nick Zieminski)

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