Source: Bloomberg
Author: Josh WingRove, Billy House
The debt of US President Joe Bayeng and the House Speaker Kevin McCarthy's debt limit came to a critical moment. On Tuesday, the meetings of the two parties may not be able to turn the situation to the situation, but may make the stalemate more and more intense.
Biden will receive McCarthy and other Congress leaders at the White House on Tuesday. At that time, McCarthy will use the reduction of expenses as a condition for suspension or increase the debt limit.The upper limit of debt.
The interest relationship is far more than the political level. The US government debt defaults will inevitably cause market selling. The White House once stated that this may cause millions of people to unemployment.Last week, the U.S. Treasury Voucher market showed that investors' fear of the government's unable to repay debt in early June. However, the market's expectations for the talks were very low.
Biden has stated that he plans to insist on vowing not to negotiate the debt limit, because the negotiations will establish a dangerous precedent, so that Republicans can use the US economy as a policy to fight for their expectations.
McCarthy insists that there is no other choice.McCarthy's control of the Republicans who occupy a faint majority in the House of Representatives rely on his appeal to conservative cut expenditures.In addition, his position on this issue became more firm during the weekend, because the 43 Senate Republicans, including the Minority Party leader Mickey McConal, signed a joint letter, claiming that he did not support simply increase the debt limit.The signature of 43 people means that even if the Democrats have proposed an unconditional proposal to increase the debt limit, they cannot overcome the long speeches of Republicans.
Washington, a timid game, has also prompted people to re -examine the possibility of the government's adoption of the 14th amendment to the 14th amendment.The amendment states that the effectiveness of US public debt is not doubtful.
On the one hand, the White House hopes to shirk the responsibility of the crisis to Congress, and at the same time does not want to make concessions.In this context, the Biden government faded this possibility on weekends.In an interview with MSNBC last Friday, Bayeng was asked if he was ready to use the 14th amendment, and he said "it hasn't reached this extent".
Treasury Minister Jennte Yelun warned that this approach may trigger the "Constitution Crisis" and not help avoiding unnecessary economic damage.Economic experts warn that this unbelled legal means will not only face the risk of frustrating in the court, just cause the United States to fall into a fiscal crisis, but also scare investors and increase the government's loan costs.
Yellen said in an interview with ABC news: "We will suffer the economic and financial disasters caused by our own hands. President Biden and the Ministry of Finance cannot take action to prevent this."
Although Biden and Yellen both refused to completely exclude the possibility of adopting this action under the failure of the negotiation failure, they both emphasized that they hope to reach an agreement in the Tuesday talks to establish a separate negotiation mechanism for the federal budget for the federal budget.Essence
Since January, the two sides have begun to obtain more chips.At that time, the US Ministry of Finance began to take the so -called "unconventional measures" to avoid more than $ 3.14 trillion in debt limit.
Bayeng government released a budget plan in March and urged McCarthy.The latter passed a proposal supported by the Republican Party and proposed that the upper limit of US debt was increased by 1.5 trillion US dollars. However, at the same time, the US government had to cut a budget of $ 4.8 trillion in 10 years. The bill was not likely to be passed in the Senate.
