2023-05-19 20:32:23
The tough negotiations on raising the debt ceiling in the USA were abruptly interrupted on Friday following encouraging signals. The Republican negotiators left the talks regarding an hour following they began, US media reported. House Republican negotiator Garret Graves told journalists that President Joe Biden’s Democrats were acting “irrationally” and that there was a pause in the talks.
Time is of the essence: At the beginning of June, the US government is threatened with a default if Biden’s team does not reach an agreement with the Republicans in Congress on raising the debt ceiling by then. In the USA, parliament sets such a limit at irregular intervals and determines how much money the state can borrow.
This time, this process turned into bitter partisan wrangling. This is dangerous for the US and beyond: a default by the world’s largest economy might trigger a global financial crisis and economic downturn.
The Republican majority leader in the House of Representatives, Kevin McCarthy, was still optimistic on Thursday: he might see the way to an agreement. Now he said there was no movement from the White House.
The Biden side had also previously spoken of progress. The financial service Bloomberg, citing negotiating circles, reported that the sticking point was not a specific issue, but the broad cut demands of the Republicans. McCarthy said the US would have to spend less money than last year.
Because of the budget crisis at home, Biden’s participation in the G7 summit in Japan was temporarily on the brink. He eventually canceled the second part of his trip abroad – a visit to Papua New Guinea and Australia – to return to Washington immediately following the Hiroshima deliberations.
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