WASHINGTON: As the danger of an economic nightmare forced US President Joe Biden to cut short this week’s trip to Asia, he and senior House Republican Kevin McCarthy held a crucial negotiation to clinch a deal to prevent a looming US debt default.
The two sides failed to agree on a deal to lift the debt ceiling after an hour of negotiations, McCarthy, the speaker of the House of Representatives, told reporters that “an agreement might be reached before the end of the week as he said coming to a consensus is not that tough.”
Democrats were less enthusiastic about the quick time frame, but the White House said the talks remained “productive and direct.” An overwhelming majority of the leaders, according to Biden, agreed that going into default on the debt was not an option as it would lead to recession.
At a White House event for Jewish Americans, Biden acknowledged that there was still work to be done but said that the parties were “on a path forward to ensure that America did not default on its debt for the first time.”
According to Biden, Republicans’ refusal to examine measures to increase revenue has him frustrated. Biden’s 2024 budget calls for higher taxes on the wealthiest and corporations in order to fund his programmes for deserving Americans.
Biden met with McCarthy, Senate Republican leader Mitch McConnell, Senate Majority Leader Chuck Schumer and House Democratic leader Hakeem Jeffries after their aides met earlier to try to strike a deal.
Republicans have refused to support raising the debt ceiling over its $31.3 trillion cap unless Biden and his Democratic allies consent to budgetary expenditure reductions.
McConnell, though, asserted following the meeting, “We know we are not going to default.”
If Congress does not vote to raise the debt ceiling, the US government may default on some debts as early as June 1. Economists worry that this may cause the US to enter a recession.
Biden is “optimistic that there is a path to a responsible, bipartisan budget agreement if both sides negotiate in good faith and recognise that neither side will get everything it wants,” according to the White House.
The staffs of Biden and the congressional leaders have had many meetings about the matter during the past week. According to McCarthy, the discussions will be more focused going ahead to allow for greater interaction between House Republicans and the White House.
The White House said that Biden will meet with congressional leaders upon his return. Biden, who is leaving for Japan on Wednesday, said he will communicate with them frequently by phone.
Along with Republican Representative Garrett Graves, White House adviser Steve Ricchetti, budget director Shalanda Young, and legislative adviser Louisa Terrell will spearhead conversations for the administration.
Meanwhile, Australia’s Prime Minister Anthony Albanese announced on Wednesday that a summit between the leaders of the United States, India, Australia, and Japan that was to be held in Sydney next week has been postponed as a result of US Vice President Joe Biden’s decision to cut short his Asia trip. He added that negotiations could still take place while the leaders were in Japan.
At the third in-person leaders’ summit of the informal security grouping on May 24, Biden was supposed to meet with Albanese, Indian Prime Minister Narendra Modi, and Japanese Prime Minister Kishida Fumio.
Biden had planned to visit Sydney as part of a week-long trip to Asia, which was to start in Hiroshima, Japan for a meeting of the Group of Seven (G7) heads of state, and include a layover in Papua New Guinea before he joined the Quad Leaders’ Summit on May 24.
The White House said on Tuesday that although Biden cancelled the further legs of the Asia trip because of the ongoing debt ceiling talks in Washington, he will still be travelling to Japan starting on Wednesday.
Formally known as the Quadrilateral Security Dialogue, the forum has gained more significance recently as the US looks to re-energize its security connections in the Indo-Pacific amid heightened rivalry with China and growing worries about Beijing’s assertive stance in the region.
