Ceiling hanging over the USA again – Mir – Kommersant

The theme of the threat of default has again returned to the US political agenda. In seeking the White House’s consent to another raise of the national debt ceiling, the Speaker of the House of Representatives, Republican Kevin McCarthy, took a non-standard step – he turned to investors to put pressure on the Joe Biden administration. The Conservatives are asking for spending cuts and more responsible economic policies. The Democrats, meanwhile, demand “not to take the economy hostage” and argue that it is not they who are leading the United States into the abyss, but the Republicans.

The US Congress on Monday returned from parliamentary recess and was immediately engulfed in sharp inter-party contradictions. It all started with House Speaker Kevin McCarthy heading to the New York Stock Exchange. Announcing his speech, he tweeted: “President Ronald Reagan spoke to the New York Stock Exchange in 1985 to share his vision of American prosperity. Tomorrow morning, I will do the same… to signal the urgent need to raise the debt ceiling responsibly.”

In his speech on Monday, the politician lashed out at President Joe Biden, accusing him of inaction. “Mr. President, with all due respect, enough! This is not how the leader of the free world should act. And without any conditions, the increase in the debt limit will not pass. But as the president continues to hide, Republicans in the House of Representatives will take action,” Kevin McCarthy warned.

He continued that “in the coming weeks” the House of Representatives will vote on a bill to raise the debt ceiling for next year, which promises “trillion-dollar savings for taxpayers, makes the country less dependent on China, reduces high inflation without affecting welfare programs and medical care.” .

At the suggestion made by Mr. McCarthy, the upcoming plan would aim to contain federal spending, with proposals to return discretionary levels of funding to 2022 levels while limiting spending growth to 1% over the next ten years.

Mr McCarthy added that this was a temporary offer that would allow America to fulfill its obligations until 2024. Then the negotiations will resume. At the moment, the US Treasury has a maximum margin of safety in terms of securing external obligations until July of this year. This was warned by the head of department Janet Yellen. In the absence of progress, the United States will face default on foreign debts.

Kevin McCarthy and Joe Biden held a meeting after the November midterm elections to Congress, where they discussed, among other things, the issue of the national debt. Both sides rated it as productive. “But, unfortunately, I have not received any news from the White House since our very first meeting,” the speaker said. And he accused the American leader of the fact that it was precisely because of his sluggishness that the United States could face “the first default in the history of the country.”

Mr. Biden and his aides have insisted from the outset that Congress should raise the debt ceiling without any preconditions, but the president is open to separate discussions on the federal budget once Speaker McCarthy presents a formal proposal for it. However, this has not yet happened.

On Saturday, talking to reporters, the US President said: “Of course, I will talk to him (Kevin McCarthy.— “b”). Show me his budget. This is the phrase “show me your budget” that has already bothered everyone. ”

Joe Biden continued: the arrangement was exactly such that both sides prepare budget proposals, and then discuss them.

White House spokesman Andrew Bates said Speaker McCarthy was engaging in a “dangerous practice” of “taking the economy hostage.” Moreover, as Mr. Bates added, the speaker “again failed to clearly define what the Republicans in the House of Representatives propose and what they will vote for.” Senate Majority Leader Chuck Schumer also echoed the White House on the day: “President Biden and I would be happy to meet with the speaker when he has something to say about the plan … What should we discuss with him now – furniture?” In addition, Mr. Schumer continued to wonder, “Speaker McCarthy came up with a terrible idea: to postpone the case for just one year and go through the same crisis again.”

But Republican leader Mitch McConnell in the Senate thinks otherwise. The politician, who returned to the Capitol after a five and a half week absence due to illness, has a lot of hope for the Republicans. It is assumed that it is he who can find a common language with the White House. At least in the past, Mr. McConnell has been quite good at it: he played a decisive role in preventing a default in 2011 and 2021.

Until now, the politician has remained on the sidelines, but on Monday he joined the fray, criticizing the US president’s refusal to negotiate on the national debt. “President Biden cannot stick his fingers in his ears and refuse to listen, speak or negotiate. And the Americans know it. The White House needs to stop wasting time and start negotiations,” insisted the Republican leader in the Senate.

The stakes are now higher than ever. The markets reacted extremely negatively when the Republicans used similar tactics in 2011. We can talk about dangerous manipulations against the background of the threat of a recession in the American economy.

At the same time, the probability of a default itself is still assessed as low – as of February 24, it was 11.3% compared to 3.3% at the beginning of the year.

Catherine Moore, Washington