Democratic President Joe Biden and the top Republican in Congress, Kevin McCarthy, edged closer to a deal on Tuesday to avert an imminent US debt default, as the threat of an economic nightmare prompted Biden to cut short a trip to Asia planned for this week. , reports Reuters.

The US government could become unable to pay off some of its debts as early as June 1 if Congress does not vote to raise the debt ceiling, and economists fear the country will enter a recession.

After an hour of talks, McCarthy, the House speaker, said the two sides remained far from a deal on raising the debt ceiling, but he added that “a deal will probably be reached by the end of the week.” and he estimated that “it is not that difficult” to reach an agreement.

Democrats were less optimistic about a quick deadline, but the White House called the meetings “productive and direct.”

“There’s still work to be done,” Biden said later at a White House event honoring American Jews. “We are on the right track to ensure that America does not default.”

Biden met for about an hour with McCarthy, Senate Majority Leader Democrat Chuck Schumer, Senate Republican Leader Mitch McConnell and House Democratic Leader Hakeem Jeffries after their aides met over the weekend to try to reach an agreement.

Republicans have refused to vote to raise the debt above the $31.3 trillion limit unless Biden and his Democrats agree to cut spending in the federal budget. After the meeting, however, McConnell said, “We know we’re not going to default.”

Biden is “optimistic that there is a path to a responsible, bipartisan budget deal if both sides negotiate in good faith and recognize that neither side will get everything they want,” the White House said.

But Biden said he was disappointed that Republicans were unwilling to look at ways to raise revenue. Raising taxes on the wealthy and on businesses to help pay for programs for other Americans is a key part of Biden’s 2024 budget.

Biden, who leaves for Japan on Wednesday, plans to continue phone talks with congressional leaders this week and meet with them after he returns from overseas, the White House said. Uncertainty over the debt ceiling prompted Biden to cancel planned stops in Papua New Guinea and Australia on his way back from the G7 summit in Hiroshima.

“We have a lot of work to do in a short amount of time,” McCarthy told reporters, saying Tuesday’s meeting in the Oval Office laid the groundwork for future discussions.

“We can raise the debt limit if we limit our spending going forward,” McCarthy told reporters.

In 2011, a similar standoff between the White House and Congress over the debt limit led to a historic downgrade in the U.S. credit rating, sending stocks selling off and raising government borrowing costs.

The current gridlock has rattled investors, pushing the cost of insuring US government debt to record highs. A Reuters/Ipsos poll released on Monday found that three-quarters of Americans fear a default would have serious consequences for their families.