“I still think we can avoid default and get something good,” Biden told reporters on the sidelines of the G7 summit in Hiroshima, Japan.
With the Treasury Department warning that the US government could run out of money by June 1 – causing massive economic turmoil at home and around the world – the political battle in Washington has run wild. No clear indication of resolution.
Republicans have been insisting that Biden must cut public spending if he wants to win their support for raising the nation’s debt ceiling, the increase or suspension of which is up to Congress to spring.
Meanwhile, Democrats say the two things cannot be linked and want an increase in the ability to issue loans without conditions.
Kevin McCarthy, leader of the Republicans in the United States House of Representatives, announced Friday that the talks had entered “stagnation” to avoid a default amid “real differences,” according to the White House.
Then the talks started. The White House reported that Biden was briefed on the situation in Japan on Saturday morning and in the United States on Friday night.
Biden’s communications director, Ben LaBolt, said “Republicans are holding the economy hostage,” in a message that has been echoed by the White House. They are “pushing us to the edge of default, which could mean the loss of millions of jobs and send the country into recession,” he said.
Although Biden will not accept “extreme” policies from Republicans, “if Republicans come back to the table to negotiate in good faith, there is a way to reach a reasonable bipartisan agreement,” he said.
Patrick McHenry, one of the Republican negotiators, told the NewsNation site on Friday that the “differences loom large on a number of issues.”
Not long ago the White House spoke of “real differences” with the opposition.
But the return of talks has restored optimism for the government, White House spokeswoman Karine Jean-Pierre expressed in Washington on Saturday after talks ended “shortly ago”.
The president, who is at the G7 summit in Japan, cut short his tour of Asia to return to Washington first to try to strike a deal.
The pro-government camp presents the talks as an opportunity to discuss the budget, on which Republicans are demanding cuts.
“We can’t spend more money next year,” Republican McCarthy said Friday in a wrestling match with the White House as June 1 approaches and the United States could enter an unprecedented moratorium .
Biden and McCarthy held two meetings in recent days as a deadline looms that the Treasury Department says could put the United States between a rock and a hard place.
Republicans claim to reduce public spending and the fiscal deficit, and they want to reduce the debt issuance that usually makes it possible to cover that gap.
Democrats and Republicans disagree on this increase in the United States’ ability to issue debt, despite the fact that the country is required to honor its payments to creditors, suppliers, and pay public officials’ salaries and pensions.
Raising the limit for debt issuance is generally a routine process in the country, which has used this Congress-dependent system for decades. But this time, as has been the case with more frequency, the matter is the subject of a political struggle.
The United States exceeded the maximum limit for public debt issuance in January, which is $31.4 trillion, and has since implemented extraordinary measures that allow it to meet obligations only for a short period of time.