2023-05-25 20:14:15
US President Joe Biden confirms that the United States will not default on its debt, while time is running out to reach an agreement between the White House and Republican negotiators on raising the public debt ceiling.
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US President Joe Biden
US President Joe Biden confirmed today, Thursday, that the United States will not default on its debt, while time is running out to reach an agreement between the White House and Republican negotiators on raising the public debt ceiling.
“There will be no default” on the debt, Biden said, referring to “productive” negotiations he is conducting with Republican House Speaker Kevin McCarthy, the leader of the narrow majority in the House.
This comes 7 days before the first of June, which is the day from which the government treasury may empty funds to service its debts. According to management estimates, defaulting on loan installments would plunge the US economy into a state of chaos, with major shocks in global markets.
The White House: Default is not an option
In turn, White House spokeswoman Karen Jean-Pierre confirmed that “fruitful” negotiations are taking place between the US presidency and the Republican opposition to avoid default.
Today, Thursday, US lawmakers begin a 10-day recess, although no agreement was reached to raise the public debt ceiling to avoid the country defaulting.
“Obviously, that means there is still room to move forward,” the spokeswoman added That the last round of talks was held virtually early Thursday, but did not give details about the content of the negotiations.
“Both sides will have to understand that neither of them will get everything they want,” she said, stressing that “default is not an option.”
It warned that the shock of a debt default could lead to the loss of 8 million jobs and “destroy retirement accounts”.
When asked about whether Biden was preparing an alternative contingency plan in case the talks failed, the spokeswoman replied that “the only option now is for Congress to do its job.”
Today, Thursday, US lawmakers begin a 10-day recess, although no agreement was reached to raise the public debt ceiling to avoid the country defaulting.
The US President and the Speaker of the House of Representatives held discussions on Monday, but they ended without reaching an agreement on how to raise the US government’s debt ceiling of $31.4 trillion.
Republicans pushed for massive cuts in public spending to raise the ceiling on government borrowing. But Biden rejected that, accusing Republicans of taking the world’s largest economy hostage and pushing it to the brink of default.
Yesterday, Wednesday, a source familiar with the issue of raising the US public debt ceiling revealed that US President Joe Biden is ready to conclude a settlement with the Republican opposition over public spending, in order to end a political conflict that may lead the United States to default on its debt.
Biden submitted to the Republican, Speaker of the US House of Representatives, Kevin McCarthy, a proposal on cuts that would reduce federal government spending by more than a thousand billion dollars over ten years.
Biden also pledged to reduce the US deficit, which exceeds $3 billion, over ten years.
The source indicated that the White House is ready to put a ceiling on public spending over a period of two years, while the Republicans are calling for a longer period.
Also read: “International Criticism” on the American debt crisis: We hope we will not wait until the last moments
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