“I am confident that we will reach an agreement on the budget and that the United States will not default on its debt,” Biden said in brief remarks at the White House before heading to the G7 summit in Japan.
Biden and congressional leaders, including Republican House Speaker Kevin McCarthy, have held two rounds of face-to-face talks seeking an agreement to raise the debt ceiling and avoid default.
Treasury Secretary Janet Yellen said Monday that the United States could start defaulting on its debt “probably as early as June 1,” while the Congressional Budget Committee expected that date to be June 15.
And Yellen warned of “catastrophic” consequences if the US administration became unable to pay its bills, which would make it unable to pay the wages of federal employees, which would lead to a significant increase in interest rates, with the accompanying impact on companies. and mortgage holders.
McCarthy is optimistic
McCarthy said Wednesday that time is running out for a deal.
“Our timetable is short,” he told reporters at the Capitol, adding that Biden and the leader of the Democratic majority in the Senate, Chuck Schumer, “finally retreated from the crazy, unreasonable, and irrational idea of simply raising the debt ceiling.”
He continued, “I am optimistic about our ability to work together,” adding, “Do we have obstacles? Yes, we have a big obstacle in the White House. But we will change the course of history because we will stand with American public opinion.”
Republicans require that Biden agree to a significant cut in budget expenditures in return for their agreement to raise the debt ceiling, ignoring the Democrats’ repeated demand for a “clean” increase in the public borrowing ceiling.
The Democrats have accused the Republicans of using excessive tactics to advance their political agenda before the time when the United States will start defaulting on its debt because the government is running out of money.
In a sign of escalating tensions over a possible default, more than 140 top US CEOs sent a letter to Biden and congressional leaders on Tuesday stressing the need for a deal.
“We strongly urge that an agreement be reached quickly so that this country can avoid a potentially devastating scenario,” said the letter, signed by the CEOs of Pfizer, Morgan Stanley and others.
We will not default
Biden confirmed that he had “shortened” his trip in Asia, scheduled after the G-7 summit, “to be here in the stage of final negotiations and signing an agreement with congressional officials,” in reference to his cancellation of two visits he had planned to make to Australia and Papua New Guinea after the summit scheduled between May 19. / May and 21 of it.
He will return to Washington Sunday for “final” negotiations over the debt ceiling.
But he stressed again that not raising the debt ceiling is not an option.
He said a default would be “catastrophic for the American economy and the American people.”
“All officials agree that we will not default on the debt,” he added.