US debt ceiling: Biden to ring McCarthy from Air Force One to restart negotiations
Kevin McCarthy and Joe Biden
As the G7 summit in Hiroshima, Japan comes to an end, US President Joe Biden has turned his attention towards the debt ceiling crisis. Biden will hold a call with House Speaker Kevin McCarthy about the issue during his flight back home, aboard Air Force One, according to a Bloomberg report.
Withthe deadline to raise the debt ceiling (June 1) precariously close, the talks between the Democrats and the Republicans have come to an impasse.According to US Treasury Secretary Janet Yellen, even the extraordinary measures, if implemented, will only buy the government a limited amount of time.
The GOP lawmakers have rejected the Biden administration's proposal to raise the debt ceiling, which otherwise used to be a routine affair. They have been demanding that the White House announce budget cuts if it wants support for the measure.
Meanwhile, Democrat lawmakers such asTina Smith, Elizabeth Warren, Ed Markey and Bernie Sanders have advised Bidento use his authority under the 14th Amendment of the Constitution to continue paying the US government’s bills, even if the ceiling is not raised.
According to them, the 14th Amendment of the Constitution should be used as an escape route. The law states: "The validity of the public debt of the United States...shall not be questioned."
Even Biden has considered the alternative, but experts fear that using it would trigger a legal battle, as well as undermine global faith in USA's creditworthiness and damage the economy.
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“I have been considering the 14th Amendment. And a man I have enormous respect for, Larry Tribe, who advised me for a long time, thinks that it would be legitimate. But the problem is it would have to be litigated," said Biden last week.
What is the debt limit?
In layman's terms, a debt limit is the amount of money that the US government can borrow to meet its financial obligations such as social security, military salaries and Medicare benefits payments.
Congress earlier this year extended the statutory debt limit to $31.4 trillion. However, the weak economic fundamentals and overflowing expenditures mean that the US will be breaching the limit. Consequently, Congress has been engaged in a fierce tussle to raise the limit.
WATCH |What is the US debt ceiling & what happens if it isn’t raised?
With the Senate under the control of Democrats and the House in Republican hands, it is highly unlikely that a straightforward limit hike will be possible.
If the congressional lawmakers cannot make a decision quickly, the world's largest economy could risk defaulting on its debt.
(With inputs from agencies)
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