Debt ceiling negotiations become urgent as Treasury says the U.S. could hit limit in weeks

The White House renewed its call for Congress to lift the debt ceiling without conditions as the nation could soon default on its debt. Since January, the government has deployed 'extraordinary measures' to pay its bills, but that could run out soon, according to the Treasury Secretary. White House Correspondent Laura Barrón-López and Congressional Correspondent Lisa Desjardins have the latest.

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  • Amna Nawaz:

    The White House is renewing its demand for Congress to lift the debt ceiling without conditions, as the nation could default on its debt in less than a month.

    Since January, the government has been deploying extraordinary measures to pay its bills, but the money could run out as early as June 1, according to an estimate by Treasury Secretary Janet Yellen. That puts Washington on high alert to avoid a dangerous and unprecedented default.

    Following all of this are our White House correspondent, Laura Barron-Lopez, and congressional correspondent Lisa Desjardins.

    Good to see you both. Thank you for being here.

  • Lisa Desjardins:

    Good to be here.

  • Amna Nawaz:

    All right, Laura, let's start with this.

    The president has said he's not going to negotiate. But, yesterday, the White House called the four congressional leaders, invited them to a meeting at the White House on May 9. What is that about? Are they changing strategy here?

  • Laura Barron-Lopez:

    In the near-term, no, they're not changing strategy. The president's position is still the same. And White House press Secretary Karine Jean-Pierre made this clear during her briefing today.

  • KARINE JEAN-PIERRE, White House Press Secretary:

    He's going to make it very clear in this meeting that they're going to have next week how it is Congress' constitutional duty to act, that he is not going to negotiate on the debt ceiling.

    Been very clear. That is not going to change.

  • Laura Barron-Lopez:

    Now, Karine, as well as other White House officials I have spoken to, say that the president in that meeting is going to say that they need to avoid a default, and that there cannot be any conditions attached to that, so, again, the message still the same.

    But, also, they are going to talk about initiating this separate process to address the budget, to address appropriations. Why now? They say because they finally saw somewhat of what House Republicans want in that bill that they passed last week.

  • Amna Nawaz:

    So, Lisa, he's going to have to work with Republicans on this. Where are they right now, especially Speaker McCarthy?

  • Lisa Desjardins:

    It's going to be a test, as it has been, I think, in the last few weeks for House Republicans.

    Right now, they also are not changing their strategy. I will report that we know Speaker McCarthy and also Republican Leader McConnell do plan to go to that meeting on May 9. They will both be there. But House Republicans insist they will not back a clean — so-called clean debt ceiling bill. That's the only thing the president says he will accept, hence our major problem here.

    In addition to that, Amna, we have some very particular dynamics in the House of Representatives, our viewer familiar with some of these. I want to look at what we're facing here.

    In the House of Representatives, Speaker McCarthy has just a four-vote majority. In addition, as part of the deal to become speaker, he agreed to a rule that allows any member to force a vote on his own removal. So, in other words, a clean debt bill, should it come down to it if McCarthy even feels that's the right thing to do, politically, would be suicide for him.

    So McCarthy needs something here to appease his base. On the one hand, one piece of, I think, pragmatic good news from Republicans is, I don't hear any Republicans saying, what's the big deal? We're not worried about the debt ceiling.

    They say they are worried about it. They don't want to risk default. On the other hand, their base is fired up about what they see as just a tidal wave of red ink, and they think this is a do-or-die moment to try and get spending cuts.

  • Amna Nawaz:

    And, Laura, there's reason to be worried, right? That deadline is coming near. But we have come close before. There have been debt limit standoffs before. We all remember the 2011 fiscal cliff.

    How are those past experiences driving the White House approach today?

  • Laura Barron-Lopez:

    It's entirely the foundation of the White House approach, Amna, because the president was a key player there, if you will remember.

    So, since President Biden took office in 2021, he's had the same line, no negotiation over the debt limit increases tied to spending cuts. He won't do it. In 2011, then-President Obama started off negotiating with then-Speaker John Boehner about spending cuts, about tax increases. They couldn't come to an agreement. And so, ultimately, the two people that hammered it out was then-Vice President Biden and then-Minority Leader McConnell in the Senate.

    And, ultimately, those two people came away with very different lessons from 2011. McConnell said then that his lesson was that you could use the debt limit to ransom, use it as ransom and take it as a hostage to get ultimate spending cuts that they want, that that was something he thought that Republicans could ultimately do again.

    President Biden's lesson was very different. He and then-President Obama walked away from that saying, no, we can never negotiate again over clean increases to the debt limit. And all of the advisers that — or allies close to the White House inside the White House, people outside the White House that I speak to say that something that's been driving the president since he took office.

  • Amna Nawaz:

    So, Lisa, we talk a lot about where the president is, where House Republicans are. What about Democrats on Capitol Hill? What's the role for them?

  • Lisa Desjardins:

    They will in the Senate, but truly what we have seen from Democrats and Republicans is acknowledgement that this really is not in the Senate's wheelhouse altogether.

    I want to play something we heard from Senator Mitch McConnell today, the House — the Senate Republican leader.

  • Sen. Mitch McConnell (R-KY):

    It should be clear to the administration that the Senate is not a relevant player this time. They have got to have a measure that can pass the House. How does it pass the House?

    It has to have the support of the speaker. And I'm behind the speaker.

  • Lisa Desjardins:

    One thing that is happening in the Senate and also in the House are some backup plans. And we're going to be doing more reporting on days to come.

    There are some Democrats talking about a maybe a discharge petition in the House. That's complicated. We will come back to that. There are bills being filed as sort of worst-case scenarios. But there's just not clear that they have the votes in either chamber.

  • Amna Nawaz:

    Laura, we can't stress this enough. What's at stake here, not just a default, but even coming close?

  • Laura Barron-Lopez:

    Coming close, there are significant economic consequences. We saw that the credit rating can be impacted the way it was in 2011.

    But if we go over the cliff, and there is a debt default, the consequences are these, at least one million jobs lost, a possible recession. The country's credit rating would tank again, as well as interest rates going up, likely cuts to Medicare and Social Security benefits and military paychecks delayed.

    And the longer the default is, the more jobs lost, up to as many as seven million. And from the White House perspective, Amna, President Biden feels as though he may have a little bit of leverage here, because even though McConnell said that this is ultimately solved by a deal between President Biden and Speaker McCarthy, the White House knows that this ultimately isn't actually solved until Speaker McCarthy can get the votes on the floor of the House and convinces Republicans to go along with any deal they come up with.

  • Amna Nawaz:

    Lisa, walk us through what comes next.

  • Lisa Desjardins:

    OK, here we go.

    We have got that May 9 meeting. But we think we have a lot of time until June 1. No, not really, because the truth is, June 1 — May 9 meeting, after that, that's when we start talks. How about this? The U.S. Senate is scheduled to recess on May 19.

    So, in Congress time, we really just have a couple of weeks. And I will tell you something that I'm watching for even some Republicans too only today on the Hill, that they may be interested in sort of a temporary extension, 30-day extension of the debt ceiling.

    Who knows. We have seen this play before. But that's something that is in the air right now.

  • Amna Nawaz:

    Congress time very different, as we know.

    Laura, while I have you here, I need to ask you about another situation I know you have been tracking on the U.S. Southern border. Title 42, as you have talked about a lot, set to lift very soon. The administration is preparing for what will surely be an increase of people coming.

    And they have announced some new measures today. What can you tell us about that?

  • Laura Barron-Lopez:

    So, the Department of Homeland Security requested that an additional number of troops be sent down to the Southern border by the Defense Department.

    This announcement would be 1,500 military troops sent to the border arriving May 10, for at least 90 days. Their tasks, though, Amna, are going to be data entry, warehouse work, administrative aid, and that is in addition to the 2,500 National Guard troops already there.

    And the White House stress today that these troops will not be interacting with migrants at all and that ultimately the reason that they're having to do this is because they expect more migrants to head to the border with the lifting of Title 42.

  • Amna Nawaz:

    Another huge story we will be following ahead.

    Laura Barron-Lopez, Lisa Desjardins, thank you so much.

  • Laura Barron-Lopez:

    Thank you.

  • Lisa Desjardins:

    You're welcome.

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