President Joe Biden and top lawmakers appeared unable Tuesday to unlock the hike in the US debt limit to $31.4 trillion, despite a face-to-face meeting three weeks before the country is due to meet. forced into an unprecedented default.
After about an hour of talks, Biden, a Democrat, and House Speaker Kevin McCarthy, a Republican, showed no sign of softening on the possibility of a default as soon as June 1.
“I haven’t seen any new movement,” McCarthy told reporters after the meeting, complaining that Biden did not agree to talks until time ran out. “That is not the way to govern,” he said. The White House, he said, “doesn’t have a plan B.”
However, he said the two sides agreed that their staff meet this week and that those responsible meet again on Friday to discuss further. Mitch McConnell, Senate Minority Leader, told reporters that there would be no debt ceiling increase without spending cuts.
Biden was expected to offer his own version of the meeting later on Tuesday.
Economists have warned that a prolonged default could plunge the US economy into a deep recession with skyrocketing unemployment, while destabilizing a global financial system based on US bonds. Investors brace for shock.
Biden calls on lawmakers to unconditionally raise the federal government’s self-imposed borrowing limit. McCarthy has said his chamber will not pass any deal that does not cut spending to deal with a growing budget deficit, saying she does not see a short-term solution.
In the past, debt ceiling fights have typically ended with a hasty deal in the closing hours of negotiations, thus avoiding a default.
In 2011, the struggle led to a historic downgrade of the country’s credit rating. Veterans of that battle warn that the current situation is more risky because political divisions have deepened.
Tuesday’s meeting It was closely watched on the eve of what is expected to be an increasingly tense period in Washington, ahead of June, when the US Treasury predicts the country could be forced to default on some debts.
McCarthy, whose party has only a slim majority in the House, wants to tie a debt-ceiling vote to sweeping spending cuts that the White House views as draconian.
Biden’s meeting with the Speaker of the House was the first since February 1.
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