White House negotiator and Republican House Speaker Kevin McCarthy plan to continue talks after Monday’s interview between their respective leaders.
Biden and McCarthy called their meeting at the White House “productive” and although it did not lead to an agreement, it at least allowed them to set their respective boundaries.
In nine days, the United States risks finding itself in the unprecedented position of not being able to pay its debts; A dangerous situation for a first world power.
If Congress does not increase the government’s borrowing capacity by then, Biden may be unable to pay officials, disburse welfare benefits and repay some creditors.
Such a bankruptcy of the United States would have ramifications for the world economy. According to analysts, this will generate panic and recession that will spread to the world economy.
To increase borrowing power – currently over $31 trillion – Republican Biden is seeking to cut spending.
Democrats are prepared to reduce spending but disagree with Republicans on how to do it.
The White House would like to impose higher taxes on the richest and biggest companies without touching social benefits or the president’s big investment projects. In short, increase the revenue of the federal government.
On the other hand, Republicans prefer to cut public spending.
According to the US press, commitment can be found in specific budget items, in the reallocation of funds earmarked for dealing with Covid, and in a spending freeze, the duration of which is bitterly debated.
Time is short, especially since it’s not just about Biden and McCarthy coming to terms with each other. As Biden put it, both would have to “sell” the deal to their respective parties in order to get it approved by both houses of Congress.
Democrats control the Senate by a narrow margin and Republicans hold a majority in the House of Representatives.
Democratic senators considered to be from the progressive wing and Republican legislators aligned with Donald Trump have already demanded maximum firmness from their respective leaders.
The US default could change the tone of the campaign leading up to next year’s presidential election.
Biden, who is seeking re-election at the age of 80, is fighting to win votes with promises of prosperity and social justice. A recession would sink his already weak approval rating.
His predecessor Trump, the favorite in the Republican primary, asked his people not to let the White House “bend” on the debt issue.