Joe Biden meets with opposition leaders to avoid US default

Joe Biden will meet on Tuesday May 16 with parliamentary opposition leaders, including House of Representatives boss Kevin McCarthy, to try to avoid a US default, which could occur as early as June 1, the Treasury Department confirmed on Monday.

The American president, at the end of a family lunch in Philadelphia (northeast), answered in the affirmative to the journalists who questioned him on the holding of this meeting.

Joe Biden, Kevin McCarthy and three other House leaders originally planned to meet last Friday, after a first round of discussions without much progress on May 9. But the meeting was postponed, and the teams of the various protagonists have been negotiating ever since.

The world’s largest economy could find itself unable to honor its financial commitments as of June 1. The Treasury Department confirmed on Monday the estimate published in early May, and updated with the “additional information now available”.

In a letter sent to Kevin McCarthy, Secretary of the Treasury, Janet Yellen, thus indicates that “the Treasury will probably no longer be able to meet all the obligations of the government if Congress has not acted to raise or suspend the debt limit in early June, and potentially as early as June 1”. She said the Treasury Department will release an update to that date next week.

Joe Biden “optimistic”

Joe Biden’s Minister of Economy and Finance also, in the letter, urged Congress to quickly seal a deal, noting that “waiting until the last minute … can cause serious damage to business and consumer confidence, increase short-term borrowing costs for taxpayers, and hurt America’s credit rating.”

Joe Biden said he was “optimistic” on Sunday. But Kevin McCarthy spoke to him on Monday of “positions (which) are still very far apart. It does not seem to me that (the White House and the Democrats) want an agreement.”

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.

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.

The former president Donald Trump urged him Republicans, over whom he retains immense influence, to “cause a default” if Democrats do not agree to “massive cuts” in spending.

The Congressional Budget Service (CBO) also referred to the beginning of June for a potential default.

With AFP