The deadline is approaching.
There are six days until June 1, the earliest date authorities estimate the United States could default on its debt, and a default could spark a recession and roil global markets.
US President Joe Biden. Photo: AFP
Meanwhile, members of the US House of Representatives have officially begun a 10-day recess after the final voting session yesterday morning and will only return to work on June 4.
However, House Speaker Kevin McCarthy said lawmakers would receive 24 hours notice if they were asked to return to vote during the recess, with negotiators representing Republicans and the White House said to have made concrete progress.
“There will be no default,” Biden said at the White House, adding that his talks with Republican House Speaker McCarthy had been “productive.”
House Republicans are demanding as much as $130 billion in cuts in exchange for raising the borrowing limit. They also want to reduce benefits and recover unused pandemic aid money.
Democrats reject the proposed cuts and want Republicans to sign off on a non-binding debt ceiling increase, as they have done dozens of times in the past.
Speaking on Fox News on Thursday, Mr. McCarrthy said he would not agree to raising taxes on corporations or the wealthy as an alternative to cuts to reduce the nation's more than $31 trillion debt burden.
Concerns about military and humanitarian crises
Economists have spent months talking about the potential for economic disaster if the US government defaults. Top military officials offered their own assessments on Thursday that the crisis would have a “significant negative impact” on the military.
“The readiness of our military will be impacted. So our large-scale exercises at various training centers will likely slow down or stop in many cases,” said Mark Milley, chairman of the Joint Chiefs of Staff.
White House Chief of Staff Jeff Zients said Republicans' objections to out-of-control government spending are disingenuous. Raising the national debt level has no impact on future spending; it simply allows the government to repay loans that have already been approved and made.
US Treasury Undersecretary Wally Adeyemo told investors at a conference in Washington that the threat of default was a “man-made crisis” that made borrowing more expensive and cost Americans money.
Without efforts to speed up the normal process, any deal would take at least 10 days to become law, as it would have to pass the House and Senate before being sent to Mr. Biden for his signature.
A round of Social Security payments worth about $25 billion is due June 2, and those payments could be suspended. An estimated 27 million Americans would fall into poverty without Social Security.
Quoc Thien (according to AFP)
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