May 11, 2023 - Politics & Policy

McCarthy embraces June 1 default deadline

Kevin McCarthy

Photo: Drew Angerer/Getty Images

House Speaker Kevin McCarthy (R-Calif.) is embracing June 1 as a hard deadline for avoiding a U.S. default, as he looks to ramp up pressure on President Biden to cut a deal on raising the debt ceiling.

Why it matters: McCarthy is trying to turn the calendar into an ally.

  • Before Biden met with congressional leaders on Tuesday, there was broad skepticism among Senate Republicans that the June 1 date was a hard and fast deadline.
  • But in staff-level conversations this week with White House officials, Republicans acknowledged that the June 1 X-date, offered at the beginning of the month by Treasury Secretary Janet Yellen, was real.
  • On Thursday evening, McCarthy publicly seized on the June 1 deadline as another reason Biden and Congress needed to get serious about avoiding default.

What they're saying: "We all know that the deadline for default is June 1," McCarthy told reporters on Capitol Hill.

  • "Apparently, President Biden doesn't want to deal. He wants to default,” he said. "Mr. President, my message is very simple: Do not miss another deadline."

Driving the news: Despite McCarthy’s hot rhetoric, officials on both ends of Pennsylvania Avenue claimed that progress was being made in the last two days of staff-level talks on cutting spending.

  • Biden and McCarthy agreed to postpone a follow-up meeting, initially scheduled for Friday, to give aides more time to talk.

The big picture: For more than three months, McCarthy has been demanding that Biden start to negotiate with him on pairing a debt ceiling with spending cuts.

  • Now that Biden officials are engaged in direct conversations with McCarthy’s team, the speaker has little interest in relieving any pressure.
  • The White House maintains that they are not negotiating over raising the debt ceiling, but are instead engaged in a two-track process.

Between the lines: On Capitol Hill (and in newsrooms), deadlines drive decisions.

  • Just because negotiators have agreed to recognize June 1 as the consensus X-date doesn’t mean that it’s the real day — or that they truly believe it.
  • The actual deadline could be as late as August, according to the Bipartisan Policy Center, which pegs the range for when the X-date can fall in early June.

Zoom out Half a world away in Japan, Yellen continued to warn about the economic and financial "catastrophe" that will hit the global economy if Congress doesn’t raise the debt ceiling.

  • She also cautioned that cutting a deal too close to the X-date could cause some damage as well.
  • "Short of a default, brinkmanship over the debt limit can also impose serious economic costs," Yellen said overnight at a G7 summit of finance ministers.

The intrigue Yellen dismissed the practicality of the White House invoking the 14th Amendment as a legal justification for ignoring the debt ceiling law.

  • “There would clearly be litigation around that," she said. "It’s legally questionable whether or not that’s a viable strategy."
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