US debt crisis: Biden vows ‘no default’
WASHINGTON, United States (AFP) — President Joe Biden declared Thursday the United States would avoid a disastrous credit default even as lawmakers went on a 10-day break without a deal on raising the nation's borrowing limit to keep paying the bills.
There are seven days until June 1 — the earliest possible point when the government estimates it could run out of money to service its debts — and missed loan repayments would likely spark a recession, roiling world markets.
But members of the House of Representatives began hitting the road for the Memorial Day recess after their final vote Thursday morning and are not due to return until June 4.
"There will be no default," Biden said at the White House, adding that his negotiations with Republican Speaker Kevin Mccarthy, who leads the narrow majority in the House of Representatives, had been "productive."
But Democratic minority leader Hakeem Jeffries slammed the Republicans from the House floor, accusing them of having abandoned their jobs in Washington to "risk a dangerous default in a crisis that they've created."
"And these Republicans, they're going to say that Joe Biden refused to sit down with them," he added. "That's a fake narrative that they've continued to try to put into the public domain."
House Republicans are demanding cuts of up to $130 billion, with spending next year capped to 2022 levels, in return for their votes to raise the borrowing cap. They also want tightened work requirements for benefits claimants and a clawback of unspent pandemic aid dollars.