US debt ceiling: no deal from Biden and McCarthy talks

Republican lawmaker Kevin McCarthy said on Monday that no agreement had been reached in talks on raising the US federal government’s debt ceiling.

McCarthy, who is Speaker of the House of Representatives, made the comments after a meeting with President Joe Biden.

McCarthy said the discussion was “productive” despite the lack of an agreement.

“I felt that we had a productive discussion. We still don’t have an agreement, but I felt that the discussion was productive in the areas (where) we have differences of opinion”, he emphasized.

He said negotiators “will meet, work all night” in a bid to reach an agreement. “I believe we can still get there,” he said.

Hours before the meeting, the Republican congressman said he believed that the negotiations were “on the right path”.

“We reiterate once again that default is out of the question and the only way forward is a good faith bipartisan agreement,” Biden said as he followed his discussion with McCarthy.

When negotiations began, Biden said he was “optimistic that we will make some progress.” He added later that a default would be “a catastrophe”.

What is the deadline for a debt ceiling agreement?

Currently, the federal government has a borrowing limit of $31.4 trillion (€29 trillion).

Biden warned that any default could have “catastrophic” consequences.

McCarthy and Biden have 10 days to reach an agreement to raise the debt ceiling.

Any deal to raise the cap must pass both chambers of Congress. Republicans control the House 222-213, while Biden’s Democrats have a narrow 51-49 majority in the Senate.

It will take several days for Congress to deliberate and pass any legislation born out of a possible deal between Biden and McCarthy.

“We can reach a deal tonight. We could negotiate tomorrow, but you have to do something this week to be able to pass it and take it to the Senate,” McCarthy said.

Treasury Secretary Janet Yellen has warned that it is “highly likely” that the government department will be unable to pay all its obligations by early June if the debt ceiling is not raised.

What Republicans Want in Exchange for a Deal

A White House official said Monday that Republican negotiators had proposed cuts to food aid programs.

Republicans also proposed a reduction in congressionally-approved COVID-19 aid and work requirements for some programs for low-income people. Party lawmakers aim to reduce spending to 2022 levels.

Biden said the latest offer made by Republicans was “unacceptable”. He said he would not support oil subsidies and “rich tax fraudsters” reducing food aid and health spending.

“We have to spend less next year than we spend this year,” McCarthy said on Monday.

“The time of spending, just spending more money on America and government is wrong,” he said after talks with Biden.

sdi/rt (Reuters, AFP)