On Monday (May 22), the discussions between President Joe Biden of the United States and House Speaker Kevin McCarthy concluded without reaching an agreement on the method of increasing the government’s debt ceiling, which currently stands at $31.4 trillion.
As a massive crisis looms, McCarthy said that the talks with Biden to counter the debt default threat had been “productive”. Both parties will continue the efforts as there are just 10 days left before a possible default that could sink the US economy.
The top lawmaker told reporters as he emerged from the White House after an hour of talks with Biden in the Oval Office: “I felt we had a productive discussion. We don’t have an agreement yet, but I did feel the discussion was productive in areas (where) we have differences of opinion.”
McCarthy said that their staff would continue the talks and he also believes that they “can still get there”.
Meanwhile, Biden after the meeting said, “Default is off the table, and the only way to move forward is in good faith toward a bipartisan agreement.”
Before the meeting, Biden said that he was “optimistic” about progress. He told reporters in the Oval Office that default was not an option. Biden said, “The American people would have a real kick in their economic wellbeing. As a matter of fact, the rest of the world would too.”
The US is facing a massive crisis as the nation stands on the verge of default if the government does not agree to raise the borrowing limit from its current 31.4 trillion dollars in order to maintain paying the nation’s debts.
Yellen warns again
Janet Yellen, who is the treasury secretary, has again warned that if the debt ceiling issue isn’t resolved then it is “highly likely” the US will run out of money to pay its bills as early as June 1.
But both sides failed to reach a common ground of understanding as the Republicans say Biden must sign up to spending cuts in exchange for their support to raise the debt ceiling, ignoring repeated Democratic calls for a “clean” increase of the borrowing limit with no strings attached.
And even if they agree to a deal, it must pass both chambers of Congress and therefore hinges on bipartisan support. Republicans control the House 222-213, while 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 from car payments to credit cards.
A White House official on Monday said that Republican negotiators had last week proposed additional cuts to programs providing food aid to low-income Americans, and emphasised no deal could pass Congress without support from both parties.