Biden-McCarthy debt talks end with no deal, as clock ticks down
- US Treasury Secretary Janet Yellen warned again on Monday that her department could run out of cash by early June
- Any legislation will take several days to move Congress, and McCarthy says a deal must be reached this week to be in time to avoid a debt default
President Joe Biden and House Speaker Kevin McCarthy ended discussions on Monday with no agreement on how to raise the US government’s US$31.4 trillion debt ceiling and will keep talking with just 10 days before a possible default that could sink the US economy.
The Democratic president and the top congressional Republican have struggled to make progress on a deal, as McCarthy pressures the White House to agree to spending cuts in the federal budget that Biden considers “extreme”, and the president pushes new taxes on the wealthy that Republicans reject.
“I felt we had a productive discussion. We don’t have an agreement yet,” McCarthy told reporters after an hour of talks with Biden in the Oval Office. He said their staffs would continue talks and added, “I believe we can still get there.”
They have just 10 days to reach a deal – until June 1 – to increase the government’s self-borrowing limit or trigger an unprecedented debt default that economists warn could bring on a recession.
Biden said before the meeting started that he was “optimistic” they could make some progress. Both sides need a bipartisan agreement to “sell it” to their constituencies, he said, adding there may still be some disagreements.