President Biden and House Speaker McCarthy negotiate to prevent US default

The Democratic president and the top Republican in Congress will have to overcome some major differences to reach a deal. The House speaker is pressing the White House to agree to spending cuts in the federal budget that Biden calls “extreme,” while the president wants new tax increases on the wealthy that Republicans have rejected.

House Speaker Kevin McCarthy negotiates the debt limit with President Joe Biden in the Oval Office at the White House in Washington, U.S., May 22, 2023. Photo: Reuters

They have just 10 days to reach a deal - until June 1 - to raise the US government's borrowing limit or trigger an unprecedented default that economists warn could lead to a recession.

The two leaders gave no indication that a deal was imminent in remarks to reporters before they met.

President Biden said he was “optimistic” that some progress could be made. He said both sides needed a bipartisan agreement, adding that there could still be some disagreements.

“I think we can eventually find common ground,” said Mr McCarthy, sitting next to Mr Biden in the Oval Office, but that differences remain.

Treasury Secretary Janet Yellen on Monday issued a stark reminder of how little time is left, saying the earliest estimated default date is still June 1 and that it is “highly likely” that the US Treasury will not be able to pay all of the US government’s bills by early June if the debt ceiling is not raised.

Other White House officials also met with Republican negotiators on Capitol Hill for two hours on Monday, and early signs suggest the talks went well.

Any deal to raise the US government’s debt limit would have to pass both houses of Congress. McCarthy’s Republicans control the House of Representatives by a 222-213 margin, while Biden’s Democrats hold the Senate by a 51-49 margin. Those margins are fairly close.

Failure to raise the debt ceiling would trigger a default that would rock financial markets and push interest rates higher on everything from car payments to credit cards.

It would still take several days for a debt ceiling increase to pass Congress if Biden and McCarthy reach a deal. McCarthy said a deal must be reached this week in time to avoid a default.

A White House official said Monday that Republican negotiators last week proposed further cuts to food aid programs for low-income Americans and stressed that no deal could pass the U.S. Congress without support from both sides.

Republicans generally want to cut spending in President Biden’s administration. Democrats want to keep spending steady at this year’s levels. Biden has said he would consider spending cuts along with tax cuts, but said some of the latest Republican proposals are “unacceptable.”

Huy Hoang (Reuters, AP)

Source: https://www.congluan.vn/tong-thong-biden-va-chu-tich-ha-vien-mccarthy-gap-nhau-khi-thoi-han-ngan-my-vo-no-den-gan-post248752.html