Joe Biden ‘hopeful’ of imminent US debt deal

WASHINGTON: President Joe Biden said on Friday that Democratic and Republican negotiators were on track to resolve an impasse over the debt ceiling, as the deadline for a potentially catastrophic U.S. default has been pushed back. until June 5.
“It’s very close and I’m very optimistic,” Biden told reporters at the press conference. The White House. “I hope we’ll know tonight if we can have a deal.”
While there is no sign that a public announcement is imminent, it is the strongest sign yet that the Washington drama may be over, allowing the government to borrow and avoid a possible default. the potential to cause a recession and shock the global economy.
Previously, Finance Secretary Janet Yellen said the dreaded X day, when the government runs out of money unless it can borrow, would now be June 5, not June 1. However, Yellen warned. that extending the deadline does not change the urgency.
“Waiting until the last minute to suspend or raise debt limits can severely damage business and consumer confidence, increase short-term borrowing costs for taxpayers, and negatively impact ratings.” credit of the United States,” she wrote in a letter. Republican leader of the House, Speaker Kevin McCarthy.
According to unconfirmed US media reports, the deal in the making will include an agreement to extend the government’s borrowing rights for two years, meaning no repeat of the current drama ahead of the general election. system in 2024.
However, Democrats will have to give in to Republican demands to cut spending on social security and other domestic programs.
McCarthy told reporters that negotiators had “made progress” but added: “Nothing is agreed until all is agreed.”
IMF Managing Director Kristalina Georgieva cited new data that she said showed “the US economy has proven resilient”, but urged a “rapid resolution” to avoid the first default in US history.
“We see the US Treasury market as an anchor for the global financial system and this anchor needs to be held,” she said.
With the country having a three-day Memorial Day weekend, members of Congress left Washington for a 10-day break of their own. Even Biden – to the amazement of some in his own party – headed to the retreat at Camp David, then his home in Delaware.
However, Wally Adeyemo, the deputy Treasury secretary, told CNN that both Biden and McCarthy are focused on avoiding disaster.
“The president has decided, the speaker said it, and we have to get some work done by June,” Adeyemo said. “The president is committed to making sure that we negotiate in good faith with the Republicans to get it done,” Adeyemo said. agreed because the alternative is catastrophic for all Americans.”
Raising the debt ceiling is an annual accounting trick often adopted with relatively little notice. It simply allows the government to continue to borrow money to pay the bills that have already arisen from the budget.
This year, the increasingly hardened Republicans decided to use the debt ceiling as leverage to force Biden to pull back on Democratic favorite spending priorities.
Republicans call this liability on the $31 trillion national debt. The White House accuses the opposition party, which controls the House of Representatives, of holding the economy hostage.
Democratic Minority Leader Hakeem Jeffries blasted Republicans out of the House on Thursday, accusing them of risking “dangerous default in the crisis they’ve created”.
Economists have spent months raising the possibility of economic disaster if the government defaults, and top military officials issued their own dire prognosis on Thursday, warning that The crisis will have a “significant negative impact” on the military.
“Readiness will obviously suffer,” Mark Milley, chairman of the Joint Chiefs of Staff, told reporters.
McCarthy pointed to a recent CNN poll that found 60% favor raising the debt ceiling if accompanied by cuts, although 51% of respondents in a new Monmouth University survey said they I want to separate these two issues.
Although lawmakers are taking a break, McCarthy said they will receive 24 hours notice if asked to return to voting.


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