Biden and McCarthy to meet to over debt ceiling

WASHINGTON (Reuters) – Democratic President Joe Biden and Republican congressional leader Kevin McCarthy will meet on Tuesday to raise the U.S. government’s $31.4 trillion debt ceiling, threatening an economically devastating default. Aim to advance agreements to avoid.

They have little time to reach agreement. The U.S. Treasury Department could run out of money to pay all its bills on Monday, as early as June 1, which could trigger a default, economists say. He repeatedly warned that it was likely to cause an economic downturn.

House Speaker McCarthy told reporters on Tuesday that his party, which dominates the floor by a wide margin of 222 to 213, will only agree to deals that involve spending cuts.

“We can raise the debt ceiling if we limit future spending,” McCarthy told reporters.

Both parties agreed on the need for urgent action. Tuesday’s White House meeting will be attended by Biden, McCarthy, Democratic Senate Majority Leader Chuck Schumer, Senate Republican leader Mitch McConnell, and House Democratic leader Hakeem Jeffries, at 3 p.m. EDT. It is scheduled to start at 19:00 Japan time.

Over the past week, staff from both sides have announced spending caps, new work requirements for some benefit programs for low-income Americans, and energy grants in exchange for voting to lift the caps, according to people briefed on them. They have been discussing various issues, including changes to About talks.

Treasury Secretary Janet Yellen told a group of bankers: “Time is running out. Every day that Congress does not act, we are experiencing increasing economic costs that could slow the U.S. economy.” Told. “There is no time to waste.”

A similar row in 2011 led to a historic cut in the US credit rating, which sent stocks down and pushed up government borrowing costs.

The current conflict has unsettled investors, with the cost of insuring exposure to U.S. government debt hitting a record high, with a Reuters/Ipsos poll completed Monday showing three-quarters of Americans expected to default. It turned out that he was concerned about causing a huge blow to families like theirs. .

“No one should be held hostage by default,” Mr. Schumer said in a Senate address on Tuesday. “The consequences would be devastating for America.”

“Too many cooks”

Some observers have expressed concern that the five-party talks will be too cumbersome for progress.

Senate Republican No. 2 John Tune told reporters that there seemed to be “too many cooks” in the talks.

“Like we’ve been saying all along, it’s Biden and McCarthy,” Toon said. “So anyone who can actually speak on behalf of the president needs to get in the room and get Mr McCarthy’s brightest to get it done.”

McCarthy himself said he would prefer a one-on-one meeting with Biden.

“If the president gets a deal, the Democrats in the Senate will vote yes,” McCarthy said. “Why are we going around and wasting our time without solving any real problems? I think we are putting our country at risk by doing that.”

Adding to the challenge of making a deal, when Mr. McCarthy took office earlier this year, he agreed to change House rules to allow only one member to call for the speaker to be removed, giving the hardliners a big deal. will give you authority. There are about 30 members of the House Liberal Party.

Reporting by David Morgan and Jarrett Renshaw, with additional reporting by Jeff Mason, Richard Cowan, and Moira Warburton.Editing: Scott Malone and Rosalba O’Brien

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