In the US debt dispute, there was a cautious approach at the crisis meeting in the White House. President Biden was then “optimistic”, but at the same time canceled a planned trip to Australia and Papua New Guinea.
After new talks about the debt dispute and the impending default in the USA, there is hope of an agreement.
The White House said US President Joe Biden was “optimistic” that both parties could find a “responsible” budget solution. Republican Kevin McCarthy also indicated that he ultimately expects an agreement.
Regardless, Biden canceled planned visits to Australia and Papua New Guinea because of the debt dispute.
Short visit to the G7 summit before new round of negotiations
The President’s new talks with top opposition Republican officials ended with a tentative rapprochement between the two sides, but no breakthrough. The White House said Biden had instructed his staff to “continue to meet daily” to discuss open issues. Biden will meet with senior Republicans upon his return from the G7 summit.
As planned, Biden will attend the G7 summit in Hiroshima, Japan this week. As the White House announced, he is canceling planned trips to Australia and Papua New Guinea after the summit, only to return to the United States on Sunday.
default should be avoided
Republican Kevin McCarthy indicated a positive outcome of the negotiations. “America is the number one economy in the world. And when we get through these negotiations, America’s economy will be even stronger,” McCarthy said.
The leader of Biden’s Democrats in the House of Representatives, Hakeem Jeffries, who was also present at the meeting, spoke of a “positive meeting” at which everyone agreed that there should be no default under any circumstances. Senate Majority Leader Chuck Schumer spoke of a “respectful” conversation. A meeting in the White House a week ago did not bring any rapprochement between Democrats and Republicans.
corporate bosses write a joint letter
In a sign of increasing nervousness about the potential consequences of a default, more than 140 US company bosses wrote a letter to Biden and Congress leaders to underscore the need for an agreement. “We urge a speedy agreement so that the country can prevent this potentially devastating scenario,” said the letter, which was signed by the heads of Pfizer and Morgan Stanley, among others.
Biden has been asking Republicans for months to agree to an increase or suspension of the statutory debt ceiling. Without an agreement, the United States is threatened with the first insolvency in its history at the beginning of June, with potentially devastating economic and financial consequences far beyond the country.
The USA had already reached the debt limit of just under 31.4 trillion dollars (almost 29 trillion euros) in January. Since then, the US government has been using “extraordinary measures” to prevent insolvency, but the options for doing so are soon exhausted. The opposition Republicans only want to approve an increase in the debt ceiling in return for cuts in government spending worth billions.