2023-05-16 21:08:07
US President Joe Biden is canceling planned visits to Australia and Papua New Guinea because of the debt dispute and the impending US default. As planned, Biden will attend the G7 summit in Hiroshima, Japan this week, as the White House announced on Tuesday. However, he is canceling planned trips to Australia and Papua New Guinea after the summit, only to return to the United States on Sunday.
Meanwhile, the president’s new talks with top opposition Republican officials have ended in a tentative rapprochement between the two sides, but no breakthrough. The White House said Biden was “optimistic” that both parties could find a “responsible” budget solution. But there is still a lot of work to be done on “a number of difficult issues”.
“We have a lot of work to do in a short amount of time,” said House Speaker Kevin McCarthy after the White House meeting. There is progress in the negotiations, direct negotiations have now been agreed between his team and the White House. An agreement in view of the impending budget crisis this week is a possibility, said Kevin McCarthy on Tuesday after a high-level meeting with President Joe Biden, among others, in the White House. However, he also stressed that Democrats and Republicans are still far apart. Senate Majority Leader Chuck Schumer called the Oval Office meeting “good and productive.”
The leader of Biden’s Democrats in the House of Representatives, Hakeem Jeffries, who was also present at the meeting, spoke of a “positive meeting” at which everyone agreed that there should be no default under any circumstances. Senate Majority Leader Chuck Schumer spoke of a “respectful” conversation. A meeting in the White House a week ago did not bring any rapprochement between Democrats and Republicans.
Biden has been asking Republicans for months to agree to an increase or suspension of the statutory debt ceiling. Without an agreement, the United States is threatened with the first insolvency in its history at the beginning of June, with potentially devastating economic and financial consequences far beyond the country.
The USA had already reached the debt limit of just under 31.4 trillion dollars (almost 29 trillion euros) in January. Since then, the US government has been using “extraordinary measures” to prevent insolvency, but the options for doing so are soon exhausted.
The opposition Republicans only want to approve an increase in the debt ceiling in return for cuts in government spending worth billions. They want to take back key elements of Biden’s reform policy, including billions in subsidies for renewable energy and a waiver of certain student fee debt. A corresponding law passed the Republican-controlled House of Representatives at the end of April
Biden rejects this and demands that Republicans agree to a debt ceiling hike without preconditions. The president accuses the opposition of taking the country’s economy “hostage” with the threat of default in order to push through their political agenda.
The US debt limit has been suspended or raised dozens of times by presidents of both parties over the past few decades – and with bipartisan majorities. The Republicans are flexing their muscles this year with their new majority in the House of Representatives.
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