Joe Biden says ‘hopeful’ on US debt deal within hours
- The president says he hopes for a resolution ‘before the clock strikes twelve’ on Friday, in the strongest indication so far that the impasse might end
- Earlier, Treasury Secretary Yellen pushed back the debt ceiling deadline to June 5, but warned there would be consequences for waiting until the last minute
President Joe Biden said on Friday he is “hopeful” for a resolution within hours to the US debt ceiling stand-off between Democrats and Republicans, raising hopes of an imminent end to the threat of default by the world’s biggest economy.
“It’s very close and I’m optimistic,” Biden told reporters at the White House. “I’m hopeful we’ll know by tonight whether we’re going to be able to have a deal.” The Democratic president said he hoped for a resolution to the stand-off “before the clock strikes twelve”.
It was by far the strongest indication that the drama in Washington might end, allowing the government to borrow and avoid a default likely to trigger a recession, mass job losses and recession.
Earlier, Treasury Secretary Janet Yellen said the dreaded X-date, when the government runs out of money unless it can borrow, will now be June 5, not June 1. Yellen, however, warned that the deadline extension does not change the urgency.
“Waiting until the last minute to suspend or increase the debt limit can cause serious harm to business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States,” she said in a letter to top Republican Kevin McCarthy.
There were glimmers of optimism. According to unconfirmed US media reports, a deal taking shape would include an agreement to extend the government’s borrowing authority for two years, meaning no repeat of the current drama before the 2024 presidential election.