AYESHA RASCOE, HOST:
Earlier today, President Biden said he's done his part to offer solutions to avoid a default on the federal debt.
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PRESIDENT JOE BIDEN: Now it's time for the other side to move their - from their extreme positions because much of what they've already proposed is simply, quite frankly, unacceptable.
RASCOE: He called out, in particular, Republican proposals that would benefit the pharmaceutical and fossil fuel industries while cutting back on food stamps and Medicaid. But the talks aren't dead yet. He also said he's talking with House Speaker Kevin McCarthy on his flight home from Japan, where he's been attending the G-7 summit. NPR's national political correspondent, Mara Liasson, joins us now. Hi, Mara.
MARA LIASSON, BYLINE: Hi, Ayesha.
RASCOE: So what do you make of what Biden said today?
LIASSON: Well, it sounds like that face-saving offramp to avoid a default is not anywhere in sight. Until now, he was talking about progress in the talks. But today, as you heard, he accused Republicans of looking for a partisan solution to something that has to be bipartisan. Now, some of this could be performative. Both sides have to prove to their respective bases that they're not going to compromise unnecessarily.
RASCOE: So what are the sticking points here, though?
LIASSON: The sticking points are mostly about spending. There were some other areas where both sides could see a compromise, like permitting reform, which would make both green energy projects and oil and gas projects happen faster, or clawing back unspent COVID funds, which both sides sounded like they were open to. But spending caps, how deep the cuts should be, how long the caps should last - that's the biggest spending - the biggest sticking point right now. And remember, if you take Social Security, Medicare and defense off the table, that means if you're going to do deficit reduction, you have to cut everything else much more deeply.
RASCOE: So Biden made these comments while in Japan after meeting with all these foreign leaders. I mean, these are big economic partners for the U.S. So how are they reacting to the possibility of the U.S. defaulting on its debt?
LIASSON: It's really rattled them. This isn't the first time a domestic problem has followed a president abroad or forced him to cut short a trip. But in this case, the debt-ceiling standoff in Washington has affected his agenda abroad. America looks dysfunctional just at a time it's trying to rally its allies to counter China. Remember, the U.S. dollar is the world's reserve currency. The U.S. is the linchpin for the global economy. A U.S. default would not only hurt the United States economy, but it could trigger inflation and unemployment and a recession around the world. And it's a self-inflicted wound.
And, you know, in the past, they - the two parties have always found a face-saving offramp. But this time it seems more elusive because you've got Republicans, like Donald Trump, saying Congress should default. You have other Republicans saying default wouldn't be too bad. It just seems much more precarious now.
RASCOE: Well, they didn't default on Donald Trump's watch (laughter).
LIASSON: No, they didn't even make the debt ceiling an issue on Donald Trump's watch...
RASCOE: Well...
LIASSON: ...Even though the deficit got bigger.
RASCOE: Exactly. Well, but what about invoking the 14th Amendment? That's something that Biden was asked about. How would that work?
LIASSON: Well, the 14th Amendment says that the validity of the public debt of the United States shall not be questioned. In other words, the - defaulting is unconstitutional. And today, President Biden said he thinks he does have the authority to stop a default by himself under the 14th Amendment. But - and he's looking at it. And the question is still unresolved. He raised questions about whether this could be done in time. But the bottom line is the president keeps saying, we'll not default. Republican leaders keep saying there won't be a default. But how to avoid that catastrophe is still a very open question with very little time to answer it because economists say we could default by June 1.
RASCOE: NPR national political correspondent Mara Liasson. Thank you so much, Mara.
LIASSON: You're welcome. Transcript provided by NPR, Copyright NPR.
