US President Joe Biden said that defaulting on financial obligations would be “catastrophic” for the states’ economy and people, stressing that he was confident that “America will not default on its debts.”
“Every politician in the room understands the consequences of our failure to pay our bills,” Biden added, during a meeting at the White House the day before yesterday, with congressional leaders before leaving for the Japanese city of Hiroshima to attend a meeting of the Group of Seven industrialized nations.
Congressional leaders in both parties (Democratic and Republican) showed some signs of optimism about eventually reaching an agreement to raise the country’s borrowing limit.
Biden described his face-to-face meeting with Republican leaders in Congress as “productive and respectful,” saying that “both Democrats and Republicans agreed that the United States cannot default.”
And the American New York Times reported that the White House is focused on avoiding an economic crisis in the country, noting that this appears to be Biden postponing his trip to Asia for a short period to return to what he called “final negotiations” to raise the debt ceiling, which is the legal maximum amount What the government can borrow to finance its obligations.
The president is scheduled to return to Washington next Sunday, skipping scheduled visits to Papua New Guinea and Australia.
The US government reached the debt limit of $31.4 trillion on January 19, as the Treasury Department uses a series of accounting methods to continue paying its bills.
And Treasury Secretary Janet Yellen confirmed that the United States may run out of money and may stop paying its bills by the first of next June, if Congress does not raise or suspend the debt limit, which may cause a recession or the abolition of jobs.
Republicans have said they want to cut federal spending before raising the ceiling, while Biden has said negotiating cuts should not be a condition of raising the debt limit.
However, Democrats seemed increasingly open to compromise with Republicans.
“Passing a bipartisan bill in both chambers is the only way forward,” said both Democratic leaders from New York, Senator Chuck Schumer and Minority Leader Representative Hakeem Jeffries, in press statements.
Biden indicated that he is open to a possible agreement with the Republicans for stricter measures regarding reducing federal aid programs, explaining that he voted for such measures, with the exception of the health insurance program “Medicaid”, when he was a member of Congress.
“I will not accept any measures that have an impact on people’s medical health needs,” he said.
Biden added that he does not believe that cutting off his foreign trip and returning to the country will help China gain influence in the region, with the White House seeking to strengthen partnerships in the region to counter China’s economic presence.
But the ongoing talks about US debt forced President Biden not to visit New Guinea and Australia.
