According to statements made by US Treasury Secretary Janet Yellen on Wednesday, President Joe Biden made an offer to Republicans during crucial debt discussions to freeze government spending at present levels. This would result in a reduction of the deficit by one trillion dollars.
Biden’s savings proposal helps reduce the gap between Republican and Democratic spending plans at a time when the two parties are working to reach a compromise that will raise the United States’ borrowing limits and prevent a potentially disastrous default on the nation’s debt.
According to a person familiar with the talks who asked to be anonymous in order to discuss ongoing negotiations, debt negotiations were scheduled to resume at noon between Republican and Democratic negotiators.
Yellen has stated on multiple occasions that the United States government may not have enough money to pay for its existing obligations beginning as early as June 1. That will be happening in eight days from now.
Yellen stated this during her appearance at an event hosted by the Wall Street Journal on Wednesday. “The President’s budget that he put forward actually proposes $3 trillion worth of deficit reduction over the course of 10 years,” Yellen added.
“In this negotiation, the President has already offered changes that would result in an additional trillion dollars of deficit reduction,” she added. “These changes would result in an additional trillion dollars of deficit reduction.”
The comments made by Yellen give the impression that the two camps are getting closer to one another on the top line figure, although considerable disagreements continue to exist regarding the method by which the deficit would be reduced.
The Republicans believe that there should be no cutbacks to the budgets for defense or border security, despite the fact that they claim their spending plans would reduce the deficit by $4.8 trillion over the course of a decade.
The White House believes that any reductions to the deficit should apply to a wider range of spending in order to ease the pressure placed on particular departments. Additionally, the White House wants to raise some taxes in order to pay the reduction of the deficit, which Republicans have consistently rejected.
According to the information provided by the individual acquainted with the discussions, the additional savings of one trillion dollars that were recommended by the president would be realized over the course of the following ten years.
According to the person, additional areas of compromise on the part of the president include recommendations to revoke unspent monies for the COVID-19 relief effort.