Biden, McCarthy Meeting Ends With No Deal on Debt
DEMOCRATIC PRESIDENT AND THE TOP CONGRESSIONAL REPUBLICAN STRUGGLE TO STRIKE A DEAL
President Joe Biden and House Speaker Kevin McCarthy could not reach an agreement on Monday on how to raise the U.S. government’s $31.4 ($FJ70.02) trillion debt ceiling with just 10 days before a possible default that could sink the U.S. economy, but vowed to keep talking.
The Democratic president and the top congressional Republican have struggled to make a deal, as McCarthy pressures the White House to agree to spending cuts in the federal budget that Mr Biden considers “extreme,” and the president pushes new taxes that Republicans have rejected.
Both sides stressed the need to
avoid default with a bipartisan deal after Monday’s meeting, however, and signaled that they’d be talking regularly in coming days.
“We reiterated once again that default is off the table and the only way to move forward is in good faith toward a bipartisan agreement,” Mr Biden said.
Mr McCarthy told reporters that negotiators were “going to get together, work through the night” to
try to find common ground. “I believe we can still get there,” Mr McCarthy said.
He is not willing to consider Mr Biden’s plan to cut the deficit by raising taxes on the wealthy and closing tax loopholes for the oil and pharmaceutical industries. He is focused on reducing spending in the 2024 federal budget. Democrats and Republicans have until June 1 to increase the government’s self-borrowing limit or trigger an unprecedented debt default that economists warn could bring on a recession.
Treasury secretary Janet Yellen on Monday offered a sobering reminder of how little time is left,
$31.4 tn is U.S government’s debt ceiling
saying the earliest estimated default date remains June 1.
It is “highly likely” that Treasury will no longer be able to pay all government obligations by early June if the debt ceiling is not raised.
Republican representative Patrick McHenry ruled out any agreement to raise the debt ceiling.
“No one’s going to agree to anything until we have a finalised deal,” he said. Mr McCarthy’s Republicans control the House 222213, while Mr Biden’s Democrats hold the Senate 51-49. A failure to lift the debt ceiling would trigger a default that would shake financial markets and drive interest rates higher on everything.