White House floats short-term debt limit hike ahead of Biden-McCarthy meeting

“I’m sure one of the things on the table we will have to work through is how long. I’m not going to take anything off the table,” said Office of Management and Budget Director Shalanda Young. “I would love to be in that part of the conversation. Because we’re at least in the positive — default is off the table.”

A senior GOP leadership aide told The Washington Times the prospect of a short-term deal could only be accepted if Mr. Biden did something to signal he was serious about entering negotiations on cutting spending. The president has accused the GOP of holding the nation’s credit hostage in their push for spending cuts and has repeatedly said he will not bargain over raising the debt limit.

The GOP is worried that if they agree to a short-term hike, Mr. Biden will take the move as a sign of weakness and refuse to negotiate, setting up another fiscal crisis. Democrats, for their part, say there might not be enough time to hold a proper negotiation. Treasury Secretary Janney Yellen has warned that Congress has until June 1 to raise the statutory limit on how much the federal government can borrow to meet expenses or risks defaulting on the more than $31 trillion debt, a move that could chaos in the financial markets and trigger a downgrading of the U.S. credit rating. There is already evidence that confidence among investors in public debt is shrinking.

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