Biden’s trip abroad in limbo as leaders scramble to avoid debt default

President Joe Biden and Vice President Kamala Harris meet with House Speaker Kevin McCarthy of Calif., and Senate Majority Leader Chuck Schumer of N.Y., in the Oval Office of the White House, Tuesday, May 16, 2023, in Washington. (AP Photo/Evan Vucci) (AP)
President Joe Biden and Vice President Kamala Harris meet with House Speaker Kevin McCarthy of Calif., and Senate Majority Leader Chuck Schumer of N.Y., in the Oval Office of the White House, Tuesday, May 16, 2023, in Washington. (AP Photo/Evan Vucci) (AP)

The White House is quietly planning for President Joe Biden to forgo planned travel to Papua New Guinea and Australia and return to the US following this week’s G7 leaders’ summit in Hiroshima, Japan.

According to a White House source who spoke to The Independent on condition of anonymity, administration officials are laying the groundwork for Mr Biden to return earlier than planned so he can participate in what could be 11th -hour talks to avert a catastrophic default on America’s sovereign debt.

Speaking at the daily White House press briefing on Tuesday, National Security Council spokesperson John Kirby declined to say that Mr Biden would skip the second and third legs of the trip, but did not include any information on them when he delivered opening remarks.

“I don't have any additional changes or additional schedule items to speak to today,” he said, adding later that the White House is “thinking through the rest of the trip”.

The uncertainty about Mr Biden’s travel plans comes as the president met with top House and Senate leaders in an effort to resolve the months-long impasse over whether the Republican-led House will approve a needed increase in the US government’s statutory debt limit, which is based on a century-old law passed to let the Treasury Department issue bonds during the First World War.

House Republicans, led by Speaker Kevin McCarthy, have demanded that Mr Biden accept caps on future spending on social programmes and roll back much of the legislative agenda that was passed and signed into law during the first two years of his term.

In a statement after the meeting, the White House said: “The President emphasised that while more work remains on a range of difficult issues, he’s optimistic that there is a path to a responsible, bipartisan budget agreement if both sides negotiate in good faith and recognise that neither side will get everything it wants.

“The President directed staff to continue to meet daily on outstanding issues. He said that he would like to check in with leaders later this week by phone, and meet with them upon his return from overseas.”

Prominent GOP figures frequently claim that raising the statutory debt limit to enable the US to continue meeting financial obligations — a practice that was once routine under presidents of both parties and met no objections when it was done under Mr Biden’s predecessor — is akin to authorising new spending.

That claim, however, does not accurately describe how the debt limit works. Raising the debt limit does not increase or decrease the amount of money that is spent on programmes that have already been authorised by Congress and have had funds allocated to them in appropriations legislation.

At the outset of the meeting between Mr McCarhy, Mr Biden, Vice President Kamala Harris, Senate Majority Leader Chuck Schumer and Minority Leader Mitch McConnell, Mr Biden told reporters that he and his congressional counterparts were “having a wonderful time” and said “everything is going well”.

Shortly after the meeting ended, Mr McCarthy told reporters there had been progress in the talks because Mr Biden had appointed a point person to conduct negotiations directly rather than continue the formless discussions among the four leaders and their aides.

“What has changed in this meeting is the president changed the scope of who’s all negotiating,” he said. “That is what the decision was made in this meeting. So the structure of how we negotiate has improved so it now gives you a better opportunity, even though we only have a few days to get it done”.

The House Speaker also appeared confident that a default could be avoided, though he maintains that if it were to occur it would be Mr Biden’s fault because the GOP House passed a bill that would have lifted it last month.

“America is the number one economy in the world. And when we get done with these negotiations, America’s economy is going to be stronger, because we’re going to make the American economy stronger and putting more people back to work, lifting them out of poverty, lowering our energy costs and, more importantly, curbing spending,” he said.

Mr Schumer, the Senate majority leader, told reporters the session had been “a good and productive meeting”.

“Everyone agreed that default would be the worst outcome, a horrible situation for America and America’s families. But we also agreed that we need to pass a bipartisan bill with bipartisan support in both chambers,” he said, adding later that even Mr McCarthy had agreed that a bipartisan bill would be the ideal outcome.

Mr Jeffries, the House Democratic leader, added that the meeting had been “positive” and “honest and open”. He also said that all participants had agreed that the “only path forward” is “a bipartisan agreement anchored in common ground”.

“We all agreed that default is not an acceptable option and must be avoided, and we all agreed that over the next few weeks we have to proceed with the fierce urgency of now in order to make sure we can reach that bipartisan, common sense, common ground agreement so that we can protect the health and safety and economic well being of the American people,” he said.

Privately, the White House has indicated that it would be receptive to allowing certain GOP demands, including some work requirements for social programmes, to become law in appropriations legislation in exchange for an increase in the debt ceiling that would allow the US to continue to pay its bills.

But the possibility of work requirements has enraged the more progressive wing of Congressional Democrats, who have bristled at the mere thought of Mr Biden signing anything which would include such provisions even though he voted for similar proposals as a senator.

One House progressive, New York Representative Jamaal Bowman, told The Independent that work requirements and cuts to the Supplemental Nutrition Assistance Programme — otherwise known as food stamps — should be “off the table,” as should be any effort to roll back anything authorised by the last Congress.

“If Republicans want to negotiate, negotiate as part of this year’s appropriations process, not ... based on policy that’s already been passed a year ago,” he said.

He added that his GOP colleagues “don’t want to have real conversations about the health of our economy” because they don’t want to consider raising taxes on the wealthiest Americans or the largest corporations in the US.

“They just want to cut, and their cuts are going to hurt poor people, hurt people of color ... hurt the overall economy and democracy,” he said.

Senator Sherrod Brown, an Ohio Democrat, said Mr McCarthy is operating on “marching orders” and a “wish list from corporate America” rather than doing what’s best for the US economy and the American people.

“He may crash the economy. He’s trying to cut money for Meals on Wheels, trying to put in work requirements. All the things he’s doing ... frankly, don’t work for so many people in this country,” he said.

Some Republicans have privately also expressed that Mr McCarthy may “go wobbly” and allow an increase in the debt ceiling in exchange for separate legislation that could include GOP priorities, rather than the standalone bill that passed the House late last month.

It was just such a move that caused Republicans to defenestrate a GOP House speaker after a prior standoff with a Democratic president.

After then-Speaker John Boehner allowed a hike in the debt limit after negotiations with then-president Barack Obama, he resigned as the hard-right flank of his conference was preparing to push him out by a parliamentary maneuever known as a “motion to vacate the chair”.

Republicans forced Mr McCarthy to change House rules to allow any single member to bring such a motion during the week-long marathon of votes that led to him being elected Speaker in January. And the possibility that he, too, could be forced out if he allows the debt ceiling to be raised without getting everything the most extreme members of his caucus want has led some Democrats to privately communicate to him that he would have some Democratic support if the House voted on whether to retain him.

But Representative Ralph Norman, an Oklahoma Republican, said it won’t come to that. He told The Independent he isn’t concerned that the GOP leader may cave in talks with Mr Biden.

“He’s not gonna give in,” he said.