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WASHINGTON -- Speaker Kevin McCarthy surprised Washington when he showed he could unite the House's raucous Republican majority to pass a sweeping package to raise the nation's debt limit by $1.5 trillion in exchange for steep spending reductions, an opening bid awaiting President Joe Biden's response.
The next moves are more difficult, and politically uncertain.
This week's stunning turnaround for the battle-hardened Republican speaker is only act one in what is expected to be a long summer battle with Democrats to find agreement to lift the nation's borrowing capacity and avert a potentially catastrophic debt default.
Biden on Thursday had no direct response to McCarthy's maneuver. The White House has made clear it is not willing to barter with Republicans over whether or not the nation will pay its bills. Democrats opposed the harsh spending cuts Republicans proposed, and the president vowed to veto McCarthy's bill.
"We're not negotiating on this," said White House press secretary Karine Jean-Pierre.
The president has indicated he's willing to talk budget issues, she said. But he's not engaging on whether or not the nation will raise the debt limit.
The U.S. is not a "deadbeat nation" and always pays its debt, she said. "House Republicans are holding our economy hostage and threatening default."
What has become apparent, though, is that Biden's refusal to negotiate may not be a tenable position for the White House as the deadline nears for action. While the White House is taking the long view, preparing to slam the Republicans for what Biden calls "wacko" ideas that will harm Americans, at some point the president, and the Democratic-led Senate, will need to respond to the House.
Economic analysts warn even the political threat of a federal default on the nation's debt, now at $31 trillion, would send shockwaves through an already jittery economy. With economic growth falling to a sluggish 1% annual rate last quarter, according to new data this week, signs point to the potential for a recession ahead.
The Treasury Department continues to pay the nation's bills, but the money will soon fall short, even though tax returns in April helped replenish the coffers. An analysis from Goldman Sachs puts the deadline for raising the debt limit in late July.