“Debt ceiling talks: Joe Biden meets Republican opposition amid threat of default”

Finally a breakthrough as default threatens? Joe Biden meets with the Republican opposition on Tuesday to try to agree on debt and public spending.

The American president will receive again, at 3:00 p.m. local time at the White House (9:00 p.m. in Switzerland), the four leaders of the Democratic Party and the Republican Party in Congress.

The most important guest will be, as in the last meeting of the same format on May 9, Kevin McCarthy: leader of the House of Representatives, held by a narrow Republican majority, much of the financial destiny of short term of the United States.

The US Treasury repeated Monday that the United States could be in default as of June 1, if no agreement is reached in Congress to raise the debt ceiling. The teams of each other have been negotiating non-stop for a week, and opinions differ on the progress of the discussions.

“Optimistic”

“I remain optimistic because I am a congenital optimist, but I really think there is a will on their part and on ours to reach an agreement. I think we will get there,” Joe Biden said on Sunday.

The White House has also said that for the moment the American president still plans to fly away on Wednesday for a diplomatic tour of Asia and the Pacific.

Kevin McCarthy said on Monday: “I think our positions are still very far apart. It doesn’t seem to me that (the White House and the Democrats) want a deal.”

The US Congress must vote quickly to raise the maximum ceiling on public debt, failing which the United States risks finding itself unable to meet its financial obligations and maturities. The Republicans refuse to do so as long as Joe Biden does not agree to make significant budget cuts.

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In fact, the famous debt ceiling of $31,000 billion was exceeded at the start of the year, but the federal government has so far managed to come to terms with it thanks to accounting manoeuvres. If the situation continues, he will no longer be able to pay salaries or pensions, repay creditors or service the debt: it would then be, for the first time, a payment default by the world’s leading economic power.

Officially, the White House wants to be intractable and does not intend to negotiate on raising the debt ceiling, a routine procedure for a long time and which, according to Joe Biden, should not be politicized since the debt has been accumulated by governments of the two edges.

78 times

“The only thing that can solve our problems is for Congress to vote to raise the debt ceiling, which they have already done 78 times” in the past, Deputy Treasury Secretary Wally Adeyemo said on Sunday. .

But in reality, the Biden administration and conservatives have already started dissecting the numbers. Several options are on the table. Republicans and Democrats could thus agree that several tens of billions of dollars planned to respond to the Covid-19 pandemic, but never used, be canceled, so as to reduce public spending. Also under discussion, according to the American press: the tightening of the conditions for granting certain social benefits for the most modest families.

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Time is running out all the more so as the parliamentary calendar, between now and June 1, is tight. The House of Representatives and the Senate, which together make up Congress, and which must likewise vote on the debt, only sit at the same time, up to this date, for four days.