UNITED STATES: On Monday, President Joe Biden and House Republican Speaker Kevin McCarthy are scheduled to meet at the White House to discuss lifting the US debt ceiling. The duo spoke on the phone on Sunday when the president was driving back from the G7 conference in Japan.
The Republicans’ demand for budget cutbacks as a prerequisite for lifting the debt ceiling has not been met with agreement by the two sides. If this isn’t done by June, the US may be forced to default on its debt.
That would mean that the government would not be able to take out any additional loans or cover all of its expenses. Additionally, it would have the potential to devastate the world economy and have an impact on worldwide prices and interest rates for mortgages.
On Sunday, as he was leaving Japan, President Biden told reporters that the Republican-controlled House of Representatives’ measures were “simply, quite frankly, unacceptable.”
“It’s time for Republicans to accept that there is no bipartisan deal to be made solely on their partisan terms. They have to move as well,” he added. But Biden also stated that in order to strike an agreement, he would be prepared to cut spending.
In order to resolve the standoff over the government deficit, the president postponed international trips that were scheduled to occur after the three-day conference in Hiroshima.
Earlier, McCarthy described his conversation with Biden as fruitful. After their talk, he told reporters, “I think we can solve some of these problems if he understands what we’re looking at.”
Negotiators held a summit on Capitol Hill on Sunday night that lasted about two and a half hours. They gathered at McCarthy’s office.
The president’s top adviser and one of Biden’s representatives, Steve Ricchetti, informed reporters that the negotiating teams will continue to work into the night.
In the meantime, Janet Yellen, the secretary of the Treasury, declared on Sunday that June 1 remained a “hard deadline.” She stated that “we expect to be unable to pay all of our bills in early June if there is no agreement.”
If the ceiling isn’t raised, the US might stop paying social insurance contributions and military and federal employees’ paychecks.
The deadlock has shaken the financial markets. The S&P 500 fell 0.1%, the Nasdaq fell 0.2%, and the Dow finished the day down 0.3%.
Republicans are asking for $4.5 trillion (£3.61 trillion) in budget cutbacks, which include scuttling a number of Biden’s legislative initiatives, in exchange for support for increasing the debt ceiling. They also want to see more money allocated to the military and border security.
Both President Biden and McCarthy are facing pressure from the left and right fringes of their respective parties to hold the line.
With Republicans holding a shaky majority in the House and a one-seat Democratic majority in the Senate, an agreement has so far proven difficult to reach.
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