President Joe Biden will hold his first meeting with House Speaker Kevin McCarthy since the Republican was elected to the position but the stakes could not be higher.
The two men must agree on how to move forward with a looming debt ceiling. The two are set to discuss the nation’s $31.4 trillion debt ceiling on Wednesday, The Guardian reported.
Furthermore, the meeting will provide the first sign of how the two will work together, or fail to, in a divided Washington.
Biden, a Democrat, and Republicans, who now slimly control the House of Representatives, are locked in a standoff over raising the federal government’s borrowing cap.
Failure to reach a deal by June could lead to a default that would shake the global economy.
It would also mark the first time ever in history that the U.S. defaulted on its payments. With it would come potentially cataclysmic economic consequences.
Experts are saying that while Republicans typically blame Democrats for spending money, it is a Republican false story that leaves out a bigger and more important story behind the federal debt that has mounted today.
The U.S. wealthy used to pay taxes. Then about a half-century ago, the wealthy went from paying taxes to the government to lending the government money.
A half-century ago, America’s wealthy population helped finance the federal government mainly through their tax payments.
Tax rates on the wealthy used to be high. But since Republican president Dwight Eisenhower, there have been tax cuts under presidents like Ronald Reagan, George W Bush, and Donald Trump. This has meant the effective tax rate on wealthy Americans plummeted.
Not only has their income tax rate dropped but other taxes that hit them hardest, such as the corporate tax, have also plummeted, meaning the rich accumulate unprecedented wealth and pay a lower tax rate than the middle-class people.
Meanwhile, America’s wealthy have been financing America’s exploding debt by lending the federal government money, for which the government pays them interest.