Talks to avoid US default make progress

After a four-hour meeting at the White House, Mr McCarthy said talks had improved and would continue into the evening. He predicted the two sides would reach a deal, although some issues remained unresolved.

President Joe Biden and Senator Kevin McCarthy continue negotiations to reach an agreement to avoid US default. Photo: Reuters

"We've made some progress... So that's very positive. I want to make sure we get the right deal. I can see that we're working towards that," Mr McCarthy told reporters.

White House spokeswoman Karine Jean-Pierre said the talks were productive. “If it continues to proceed in good faith, we can reach an agreement here,” she said at a briefing while discussions were ongoing.

But the White House and Democrats in Congress have also accused Republicans of holding the economy hostage. They say Republicans need to make more concessions because they will need Democratic votes to pass any deal.

Time is running out, as the US Treasury Department has warned the federal government may not be able to pay all its bills as soon as June 1 - just eight days away - and it will take days to pass legislation in the closely divided US Congress.

Mr McCarthy has stressed that any deal must not raise taxes and must cut some US government spending (about 8%), not leave it unchanged as Mr Biden has proposed.

Ratings agency Moody's could change its rating on U.S. debt if lawmakers signal a possible default. Moody's currently has the highest "Aaa" rating on U.S. debt, while rival ratings agency S&P Global cut its rating after the debt ceiling debate in 2011. A lower rating could push up borrowing costs.

The months-long standoff has spooked Wall Street, weighed on U.S. stocks and pushed the country's borrowing costs higher. U.S. stock indexes fell on Wednesday on concerns about the debt ceiling.

Economists say a default would trigger a Wall Street meltdown and push the U.S. economy into recession, as well as impacting ordinary Americans. Public health providers could be among the first to feel the heat.

Huy Hoang (according to Reuters)

Source: https://www.congluan.vn/cac-cuoc-dam-phan-ngan-my-vo-no-dat-duoc-tien-trien-post248991.html