Mr McCarthy said earlier on Saturday that talks had made “progress” on raising the US government ’s debt ceiling. Mr Biden said earlier on Friday: “It’s very close and I’m very optimistic.”
House Speaker Kevin McCarthy (center) is at the center of the US debt ceiling negotiations. Photo: Reuters
“Republicans want to cut spending. Those are the demands we’ve made to raise the debt ceiling, including healthy people needing to get back into the workforce. Those are big issues… Most of the issues that are out there, they need to be addressed,” McCarthy added on Saturday.
Time is running out for a debt ceiling deal. The U.S. Treasury Department said Friday that the government will not have enough money to pay all its bills by June 5 without raising the debt ceiling, a slightly later date than the previous June 1 warning.
Hard-line Republicans have threatened to block any bill that fails to meet their demands, including deep spending cuts. Democrats, in contrast, have opposed tighter control over the country's anti-poverty programs.
Republicans still reject Biden’s proposed tax increases on the wealthy. But there is no opposition to Biden’s signature infrastructure plans and green energy legislation, while the Internal Revenue Service will see its budget slightly reduced compared to its recent one.
Republicans also want to tighten Medicaid, the health care program for the poor, and SNAP, a food assistance program that Democrats say would hurt people who are struggling to make ends meet. Both programs were significantly expanded during the COVID-19 pandemic but have recently been scaled back.
However, the two sides have reached some temporary agreements, such as the deadline for raising the debt ceiling (if reached) will be extended until after the US presidential election in November 2024. The agreement will also increase spending on the military and veterans care, while limiting spending on many domestic programs.
If Congress fails to raise the debt ceiling by June 5, it could trigger a default, roiling financial markets and sending the United States into a deep recession. The United States could be downgraded, driving up borrowing costs and weakening its standing, as happened in 2011.
Huy Hoang (according to Reuters)
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