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Republican and Democrat say they’ll have a ‘failsafe option’ for US to avoid financial default if debt ceiling talks between Kevin McCarthy and Joe Biden fall through
- The bipartisan heads of the ‘Problem Solvers Caucus’ said they would rather let the House Speaker and the President negotiate but they have a back-up
- If the US defaults on its debts it could have ramifications on the world economy
- House Republicans have said they won’t raise the limit without spending cuts
The leaders of the bipartisan House Problem Solvers Caucus said on Sunday that they’re working on a ‘failsafe option’ for the U.S. debt limit, in case talks between House Speaker Kevin McCarthy and President Joe Biden fall through.
‘I think it’s irresponsible not to have the conversation, just like it’s irresponsible to default on our responsibilities as a country and put the full faith and credit of the United States at risk,’ New Jersey Democratic Rep. Josh Gottheimer told CNN’s State of the Union on Sunday.
Co-head of the caucus, GOP Rep. Brian Fitzpatrick of Pennsylvania, said: ‘We cannot allow our country to default under any circumstances.’
House Republicans have been in a stalemate with the White House and Senate Democrats amid urgent warnings from the Treasury that action needs to be taken to raise the debt ceiling.
Failure to do so could send the U.S. careening into default – plunging the global economy into a tailspin.
Reps. Brian Fitzpatrick (right) and Josh Gottheimer (left) are the bipartisan co-chairs of the House of Representatives’ Problem Solvers Caucus
The House’s GOP majority has made clear that it will not move to raise the debt limit unless it was offset with future government spending cuts.
And while they hope a solution can be reached after McCarthy left a meeting at the White House on a seeming high note last week, Fitzpatrick and Gottheimer are also prepared to step in with a plan if the two parties can’t agree on adequate cuts to pass a debt limit deal.
‘Our hope, of course, is that leadership and the White House are able to work something out,’ the Democrat said.
His Republican colleague echoed, ‘We’re going to let them do their work. We don’t want to undermine anybody.’
‘But what Josh and our group do together is, we don’t negotiate in public. We work everything out,’ Fitzpatrick said.
‘We have a failsafe option in the backdrop that will be ready to go to make sure that we get this job done.’
The limit is the total amount of monetary debt the federal government is allowed to carry, with which it pays military salaries, social security benefits, and other programs that affect millions of people.
Fitzpatrick claimed that current regulation which sees the debt ceiling regularly raised – and increasingly argued over – by specific monetary amounts ‘doesn’t make any sense.’
He suggested instead that it be converted to a ‘debt-to-GDP ratio.’
They said they’d stand behind House Speaker Kevin McCarthy (pictured) in making a deal with the White House to avert a default
But President Joe Biden has until now maintained that he will not negotiate on spending cuts regarding the debt limit, calling raising the ceiling an ‘obligation’
‘A number that could be agreed to, have a cure period thereafter,’ Fitzpatrick explained.
‘And if that cure does not occur, certain guardrails go up on discretionary spending.’
He explained that the U.S. currently has ‘a debt-to-GDP ratio that exceeds 100 percent.’
‘That’s occurred two times in our nation’s history, World War II and now,’ Fitzpatrick said.
‘And that threatens the valuation of our currency and risks our competitiveness with China, and we see how big of a threat that is. So, that’s the solution that I would like to advance.’
Ahead of his meeting with McCarthy, Biden maintained that raising the debt ceiling cannot be a point of negotiation because it’s an ‘obligation’ of the U.S. government to do so.
But the Republican leader told reporters afterwards that talks would continue.
‘The president and I had a first good meeting – I shared my perspective with him, he shared his,’ McCarthy said outside of the White House.
He said there were ‘no agreements, no promises, except that we would continue this conversation.’
The White House called their meeting ‘frank and straightforward.’