Republicans have urged Joe Biden to axe nearly $500 billion in unused Covid funds to tackle the debt ceiling crisis. While the President and Speaker Kevin McCarthy met on Thursday to address the possible crisis, no deal on raising the limit was struck.
But both Biden and McCarthy left optimistic about the prospects of striking a deal before June 5, when the US is tipped to default on its debt obligations, risking a recession.
“Let’s start treating each other with respect,” Biden said. “That’s what Kevin [McCarthy] and I are going to do.”
“We had a good meeting yesterday. It doesn’t mean we’re going to agree, and [not] fight like hell. But let’s treat each other with respect.”
However, as the leaders open discussions on how to resolve the crisis, House Republicans have signalled a key area to claw back some funds for the Treasury.
Rescinding approved but unspent Covid relief funds “certainly could” be in a debt ceiling measure to avert default, Rep Tom Cole, R-Oklahoma and chair of the Rules Committee, said.
“I would hope we look at that,” Cole said. “It’s something that ought to be on the table.”
Rep Mike Kelly, R-Pennsylvania and on the Ways and Means Committee, said it would be “insane” for Congress not to look at options to cut red ink by nixing unnecessary spending.
“There’s areas that we should not be spending and where we could actually either reposition or just not spend it, and then bring down our debt,” he said.
“We can make cuts that don’t hurt people.”
READ MORE: McCarthy doing ‘great job’ representing GOP in debt talks
House Republican aides noted government estimates show $4.61 trillion has been authorised in Covid-19 spending, but $4.12 trillion has been spent.
That leaves nearly $500 billion in unspent funds, although a portion of that has been “obligated” to certain pots of money and may be difficult to return to the Treasury.
And on Wednesday, at an Oversight Committee hearing about federal pandemic spending, Rep Andy Biggs, R-Arizona, pressed the US Government Accountability Office on how much of the money is left and unspoken for.
“As of November 2022, there’s about $157 billion unobligated funds,” Gene Dodaro, the comptroller general, responded.
“Unencumbered, unobligated, unspent?” Biggs asked, which Dodaro confirmed.
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Meanwhile, McCarthy declined to say when Republicans will put pen to paper on a spending cut plan.
“I’m not going to negotiate this in the press. I’m sorry,” he said.
But after leaving the White House, the California Republican told reporters; “He’ll give me a call in a couple days to set up the next meeting.
“We’re going to meet again about the debt ceiling and ways that we can find ways for savings and put ourselves on a path to balance.”
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