Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

US debt ceiling: Biden and Republicans hopeful of a deal

US debt ceiling: Biden and Republicans hopeful of a deal

President Joe Biden and Republican leaders have expressed cautious optimism that a deal to raise the US debt ceiling is within reach, following emergency talks at the White House.

But House of Representatives Speaker Kevin McCarthy told reporters the two sides are still far apart.

The standoff has forced Mr Biden to cut short a foreign trip.

Without a deal, the US could enter a calamitous default on its $31.4tr (£25tr) debt as soon as 1 June.

A failure by the US government to meet its debt obligations could trigger global financial chaos.

The Democratic president said Tuesday's hour-long Oval Office meeting was "good, productive", sounding upbeat about the prospects of an agreement.

Mr McCarthy said afterwards he believed a deal was possible by the end of this week.

Asked about the risk of the US falling off a fiscal cliff, the California congressman told BBC News: "The great thing about that question is we've already taken default off the table."

He also told reporters a Biden-appointed representative would negotiate directly with his staff, which he said was a sign that "the structure of how we negotiate has improved".

A number of senior Democrats were at the talks, including Vice-President Kamala Harris, Senate Majority Leader Chuck Schumer and House Minority Leader Hakeem Jeffries.

In exchange for support for raising the debt ceiling, Republican leaders are demanding budget cuts. They also want tougher work requirements on government aid recipients.

Citing sources familiar with the talks, the Associated Press news agency reports that this idea was "resoundingly" rejected by House Democrats at another meeting earlier on Tuesday.

Mr Biden has repeatedly said that a potential debt default and budgetary issues should be separate.


The president is due to fly to the G7 summit in Japan on Wednesday. He was then expected to head to Papua New Guinea and Australia for further meetings.

But he will now return after the 19-21 May summit ends in Hiroshima to "ensure that Congress takes action" to avert a default, the White House said in a statement.

The so-called Quad meeting in Sydney has now been cancelled, and the leaders will attempt to meet on the sidelines of the G7, Australian Prime Minister Anthony Albanese said.

Reaching the debt ceiling would mean the US government is unable to borrow any more money.

This means the government would no longer be able to pay the salaries of federal and military employees. Social Security cheques - payments that millions of pensioners in the US rely on - would stop.

Every so often the US Congress votes to raise or suspend the ceiling so it can borrow more.

A default - which would be a first in US history - could shatter trust in America's political ability to pay its bills.

Experts have warned it could also see the US spiral into recession and trigger a rise in unemployment.

Treasury Secretary Janet Yellen said at an event on Tuesday that "a US default would generate an economic and financial catastrophe".

Meanwhile, White House National Security Council spokesman John Kirby said: "There's countries like Russia and China that would love nothing more than for us to default."

A deal to avoid this scenario has so far proven elusive. In April, Republicans proposed an agreement that would suspend the debt limit by $1.5tn or until 31 March, whichever comes first.

In exchange, they would maintain spending at key government agencies at 2022 levels for the next financial year and limit spending growth to 1% annually over the next 10 years.

They argued this would lead to $4.8tn in savings.

The proposal, however, would scupper several of Mr Biden's legislative priorities, including student loan forgiveness.

The last time the US was approaching a default, back in 2011, lawmakers struck a deal hours before the deadline.

That standoff led to a downgrade in the US credit rating, sent the stock market plummeting and increased the government's borrowing costs.

"Nobody should use default as a hostage," Senate Majority Leader Chuck Schumer said at the US Capitol on Tuesday. "The consequences would be devastating for America."

The US debt ceiling has been raised, extended or revised 78 times since 1960.

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Hungarian Prime Minister Viktor Orbán stated that Hungary will not adopt the euro because the European Union is falling apart.
Mayor in western Germany in intensive care after stabbing
Australian government pays Deloitte nearly half a million dollars for a report built on fabricated quotes, fake citations, and AI-generated nonsense.
BYD’s UK Sales Soar Nearly Nine-Fold, Making Britain Its Biggest Market Outside China
Latvia to Bar Tourist and Occasional Buses to Russia and Belarus Until 2026
Wave of Complaints Against Apple Over iPhone 17 Pro’s Scratch Sensitivity
Munich Airport Reopens After Second Drone Shutdown
Pro Europe and Anti-War Babiš Poised to Return to Power After Czech Parliamentary Vote
Sean ‘Diddy’ Combs Sentenced to Fifty Months in Prison Following Prostitution Conviction
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Tokyo’s Jimbōchō Named World’s Coolest Neighbourhood for 2025
European Officials Fear Trump May Shift Blame for Ukraine War onto EU
The Personality Rights Challenge in India’s AI Era
Italy Considers Freezing Retirement Age at 67 to Avert Scheduled Hike
Italian City to Impose Tax on Visiting Dogs Starting in 2026
Study Finds No Safe Level of Alcohol for Dementia Risk
Trump Says Ukraine Can Fully Restore Borders with NATO Backing
Europe Signals Stronger Support for Taiwan at Major Taipei Defence Show
Germany Weighs Excluding France from Key European Fighter Jet Programme
Cyberattack Disrupts Check-in and Boarding Systems at Major European Airports
Björn Borg Breaks Silence: Memoir Reveals Addiction, Shame and Cancer Battle
When Extremism Hijacks Idealism: How the Baader-Meinhof Gang Emerged and Fell
JWST Data Brings TRAPPIST-1e Closer to Earth-Like Habitability
Trump Orders $100,000 Fee on H-1B Visas and Launches ‘Gold Card’ Immigration Pathway
France’s Looming Budget Crisis and Political Fracture Raise Fears of Becoming Europe’s “Sick Man”
Three Russian MiG-31 Jets Breach Estonian Airspace in ‘Unprecedentedly Brazen’ NATO Incident
European manufacturers against ban on polluting cars: "The industry may collapse"
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
Christian Brueckner Released from German Prison after Serving Unrelated Sentence
World’s Longest Direct Flight China Eastern to Launch 29-Hour Shanghai–Buenos Aires Direct Flight via Auckland in December
New OpenAI Study Finds Majority of ChatGPT Use Is Personal, Not Professional
The conservative right spreads westward: a huge achievement for 'Alternative for Germany' in local elections
Pope Leo Warns of Societal Crisis Over Mega-CEO Pay, Citing Tesla’s Proposed Trillion-Dollar Package
Poland Green-Lights NATO Deployment in Response to Major Russian Drone Incursion
U.S. and China Agree on Framework to Shift TikTok to American Ownership
Le Pen Tightens the Pressure on Macron as France Edges Toward Political Breakdown
Czech Republic signs €1.34 billion contract for Leopard 2A8 main battle tanks with delivery from 2028
Penske Media Sues Google Over “AI Overviews,” Claiming It Uses Journalism Without Consent and Destroys Traffic
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
One in Three Europeans Now Uses TikTok, According to the Chinese Tech Giant
Could AI Nursing Robots Help Healthcare Staffing Shortages?
NATO Deploys ‘Eastern Sentry’ After Russian Drones Violate Polish Airspace
The New Life of Novak Djokovic
German police raid AfD lawmaker’s offices in inquiry over Chinese payments
Volkswagen launches aggressive strategy to fend off Chinese challenge in Europe’s EV market
France Erupts in Mass ‘Block Everything’ Protests on New PM’s First Day
×