Republicans in the US Congress are demanding budget cuts in exchange for raising the US government's borrowing limit, while the White House has insisted for months that the country's credit should not be used as a negotiating tool.
US President Joe Biden. Photo: AFP
Meanwhile, investors remain nervous about the possibility that the U.S. government could actually default on its debt. Negotiations remain deadlocked despite weeks of warnings from government officials and bankers that a default could have dire consequences, including a recession for the country and the potential for global contagion.
However, on Sunday, Mr Biden said he thought he would be able to reach a deal.
"I'm still optimistic because I'm a natural optimist, but I do think both sides want to make a deal. I think we'll get there," Biden told reporters.
Negotiations between Mr Biden and Republican leaders, including House Speaker Kevin McCarthy, were postponed from last Friday to this week.
Treasury Secretary Janet Yellen has warned that a default could happen before June 1, while the Congressional Budget Office is predicting June 15.
“If Congress doesn’t raise the debt limit before default, we’re going to go into a recession and that would be a disaster,” said Deputy Treasury Secretary Wally Adeyemo.
Mr Biden has said he wants to raise the debt ceiling “cleanly”, but Republicans say raising the debt ceiling would have to come with significant spending restrictions.
“It’s time to get spending back to pre-Covid levels, and then we can talk about raising the debt ceiling,” Byron Donalds, a Republican from Florida, told FOX News on Sunday. “If Biden doesn’t bring something new to the table, he’s the one who’s going to send our country into default.”
Former President Donald Trump has encouraged Republican lawmakers to keep the debt ceiling in place if Mr Biden does not agree to “massive spending cuts”.
The incident also affected Mr. Biden's visit to Asia to attend the G7 leaders' meeting, along with other events in the region.
Hoang Nam (according to AFP)
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