US Congress on break as deadline for debt default looms

US lawmakers went on a 10-day break on Thursday, despite not agreeing to raise the country’s borrowing limit to avoid defaults that could cause a global negative economic storm.

And there remain seven days until the date of the first of June, which is the date when the US Treasury expected that the government would run out of money and default on paying its debts.

But members of the House of Representatives actually went into recess after their final vote Thursday morning, and won’t return until June 4.

Senators are scheduled to return two days before the so-called “Day X”, which will be determined later, but their role is likely to be limited to concluding any agreement reached between the Republican-led House of Representatives and the Democratic President, Joe Biden.

House Speaker Kevin McCarthy said lawmakers will get 24 hours’ notice if they are asked to come back to vote, as news suggests that negotiators representing Republicans and the White House are beginning to bridge their differences.

Republicans are calling for cuts of up to $130 billion, with spending next year set at 2022 levels, and have laid out three other pillars for a deal: approval reform for energy projects, tougher work requirements for benefit claimants, and refunds of unused pandemic aid money.

But the Democrats reject the proposed cuts, and want the Republicans to sign an increase without restrictions, as they have done dozens of times in the past.

In turn, McCarthy rejected demands to pass the project without cutting spending, and added that he would not agree to increase taxes on companies or the rich as an alternative to cuts to reduce the country’s debt burden of 31 trillion dollars.

McCarthy said: “We know where our differences are, and we will remain at the table to try to solve this problem.”

White House chief of staff Jeff Zients suggested Republican objections to out-of-control government spending were disingenuous, pointing to their plan to extend Donald Trump’s tax cuts, which Democrats say would add $3.5 trillion to debt.

The threat of default is an “artificial crisis” that is already making borrowing more expensive and costing Americans money, Deputy Treasury Secretary Wally Adeyou told investors at a conference in Washington.

Without efforts to speed up the process, any agreement would require at least 10 days to be formalized legislatively, pass the House and Senate, and reach Biden’s desk.

A batch of Social Security payments, worth about $25 billion, is scheduled to come out on June 2nd, and these payments can be stopped if the Treasury Department is unable to cover the loan repayments, and it is estimated that an estimated 27 million Americans will fall into poverty. without social security.