Will the Federal Government Default? Lawmaker Says Debt Limit Crisis ‘Past Point of No Return’

After a weekend of on-again, off-again negotiations over raising the nation’s debt ceiling, there is still nothing close to an agreement between congressional Republicans and the White House. 

Joe Biden landed in Washington overnight after the G7 summit, cutting off the second half of his trip to the Asia Pacific region. He spoke to House Speaker Kevin McCarthy (R-CA) by phone Sunday and both sounded somewhat positive.

Biden told reporters the call “went well.” McCarthy said, “I believe it was a productive phone call.”
But there’s still no deal, so Biden and McCarthy meet Monday afternoon with congressional leaders. 

Republicans want the federal government to spend less next year than this year. The White House proposed raising taxes on business. 

McCarthy said, “I’ve been very clear to him from the beginning. We have to spend less money than what we spent last year.”

Biden is calling Republican demands “extreme,” saying, “I think there are some ‘MAGA’ Republicans in the House who know the damage that it would do to the economy and because I am president, and presidents are responsible for everything, Biden would take the blame.”

Biden says he believes he has the legal right to invoke the 14th Amendment to the U.S. Constitution to raise the debt ceiling, but there’s not enough time to get through the legal challenges.

Texas Republican Sen. Ted Cruz, a constitutional scholar, told CBS that Biden’s view was “legally frivolous.”

Cruz said, “Someone else who agreed with that was Barack Obama. The Left tried to convince Obama to do this and Obama said, ‘No you can’t do this under the Constitution.'” 
Treasury Secretary Janet Yellen said again over the weekend that she believes June first is the hard deadline for a default if there’s no deal.

The Wall Street Journal is reporting that a government default would tip the economy into a recession, costing more than seven million jobs, and causing the stock market to lose 20 percent of its value.  

Former Defense Secretary and CIA Director Robert Gates told CBS’s Face the Nation that the crisis is hurting America’s global reputation.

“Having these episodes of great crisis and then some solution at the last second really feeds the notion that the U.S. political system isn’t working at all,” Gates said.

Making matters worse, one Republican lawmaker suggested the crisis was already past the point of no return, saying there was no way Congress could reach an agreement by the June 1st deadline.