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WASHINGTON — U.S. President Joe Biden is sitting down with his new Republican nemesis for the first time to talk about how to ensure the federal government can continue to pay its bills. 

House Speaker Kevin McCarthy says he wants to avoid a U.S. default, and insists that cherished programs like Social Security and Medicare are off the table.

But McCarthy's torturous, 15-ballot bid to become speaker required a deal with caucus holdouts that federal spending next year be capped at 2022 levels, an eight per cent reduction. 

Biden, for his part, has insisted that he won't negotiate on the debt ceiling — something the White House likens to holding a gun to the head of the U.S. economy. 

Democrats say that without a clear Republican plan for lower spending, cuts to social programs are the only way that goal would be possible. 

White House spokesperson Andrew Bates says McCarthy's idea of "strengthening" Social Security and Medicare is simply political code for deep spending cuts. 

"Show me his budget," Biden shouted over the din of whirring helicopter blades Tuesday when asked if he was willing to negotiate with the Speaker. 

U.S. National Economic Council director Brian Deese and Shalanda Young, head of the Office of Management and Budget, issued a public memo Tuesday spelling out how the president plans to engage with McCarthy. 

"Raising the debt ceiling is not a negotiation; it is an obligation of this country and its leaders to avoid economic chaos," the memo said. 

"President Biden will ask Speaker McCarthy to publicly assure the American people and the rest of the world that the United States will, as always, honour all of its financial obligations."

The memo goes on to cite a number of spending measures that House Republicans voted for, supported or proposed in recent months that Democrats say would increase the deficit by trillions of dollars over the next 10 years.

McCarthy suggested Tuesday that the discussion is already mired in politics. 

"I'm not interested in political games," he said. "I'm coming to negotiate for the American people." 

The U.S. reached the statutory limit for its outstanding debt on Jan. 19, at which point Treasury Secretary Janet Yellen enacted a suite of "extraordinary measures" to stave off a default until early June. 

But those measures can't do anything about the economic uncertainty that will persist for as long as the two sides don't have an agreement, said Ben Harris, the treasury's assistant secretary for economic policy. 

"Even just the threat that the U.S. government might fail to meet its obligations may cause severe harm to the economy by eroding household and business confidence, injecting volatility into financial markets and raising the cost of capital — among other negative impacts," Harris said.  

This report by The Canadian Press was first published Feb. 1, 2023.

James McCarten, The Canadian Press