U.S. President Joe Biden speaks to the media before departing the White House in Washington
OAN’s Daniel Baldwin
9:31 AM – Saturday, May 27, 2023
President Joe Biden says an agreement on the debt ceiling is “very close” as he left for Camp David Friday.
“With regard to the debt limit, things are looking good,” Biden said before boarding Marine One.
“I’m very optimistic.”
Biden’s comments came after Treasury Secretary Janet Yellen pushed back the deadline for a possible United States default to Monday, June 5th – four days later than expected.
“We know it’s a crunch time,” House Speaker Kevin McCarthy (R-Calif.) said. “We know it’s not easy, but we’re not just trying to get an agreement. We’re trying to get something that’s worthy of the American people.”
Yellen said the Treasury must make $130 billion in payments to Social Security, Medicare, and veterans during the first week of June. She claimed the government’s resources would be “inadequate to satisfy all of these obligations” if it reached that point.
“If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests,” Yellen wrote to lawmakers Friday.
Reagan Economist Dr. Arthur Laffer downplayed Yellen’s hysteria about the situation on OAN’s “Weekly Briefing.”
“It’s not quite a nothing burger,” Laffer explained. “But it’s really very, very inconsequential, because we all know that sooner or later the debt ceiling will be raised.”
Laffer also explained this rationale, saying Yellen can move payments around based on when the ceiling gets raised.
“Let’s imagine we don’t hit the debt ceiling right on time,” said Laffer. “And let’s imagine they have to do some supplemental issues there. [Yellen] can control what spending is done, and how much it’s done. We may have to delay the payment of some bills a week or 10 days or something like that, but none of these are in doubt of being paid. The revenues are way, way up. It’s overspending that really is the issue. Kevin McCarthy is completely correct on that.”
A poll conducted by CNN revealed that 60% of Americans believe Congress should only raise the nation’s debt ceiling if it cuts spending at the same time. The poll shows that Americans are backing House Republicans in the standoff.
“Just remember that the government doesn’t create resources,” Laffer said. “Government redistributes resources. So every time it gives someone $1 who hasn’t worked, they take $1 away from someone who has worked out. That’s just math. It’s just simple. Government spending is taxation, pure and simple.”
House Republicans passed a bill to raise the debt ceiling in April. The “Limit, Save, Grow” Act would set federal discretionary spending at $1.47 trillion during the next fiscal year. The bill would also allow spending to increase 1% annually from there. That is significantly below the rate of inflation in most years.
Biden’s negotiators and McCarthy’s teams will remain in touch over the weekend, pushing for a midnight deal. But with no bill to vote on, House Lawmakers have also left Washington for the Memorial Day weekend. They’ll be given 24 hours notice to return if a deal is reached.
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