The fronts have hardened and time is of the essence: US President Biden has barely returned from the G7 summit in Japan when negotiations on the debt dispute continue in Washington. Can a payment default be averted?
No agreement is in sight in the deadlocked dispute over raising the debt ceiling in the USA. Today, US President Joe Biden and the chief negotiator for the opposition Republicans, Kevin McCarthy, want to meet again for a top-level discussion.
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.
Sharp criticism from the US President
In view of the tough negotiations, President Joe Biden yesterday accused the Republicans of taking extreme positions. Some of the Republican negotiators’ proposals are simply “unacceptable,” said Biden at his final conference at the G7 summit in Hiroshima, Japan. Republicans must understand that there can be no bipartisan agreement that “exclusively, exclusively” follows their terms.
Biden said he was ready to cut government spending as Republicans are calling for. But one must also talk about government revenue, specifically about tax increases for top earners. The Republicans are not ready for that. Biden complained that there were significant differences of opinion on this point. “We can reach an agreement,” stressed Biden. “A default is not an option.”
Danger of a global financial crisis
In the USA, parliament sets such a limit at irregular intervals and determines how much money the state can borrow. This time the procedure has degenerated into bitter tugging, which harbors great dangers: A default by the world’s largest economy could trigger a global financial crisis and an economic downturn.
The dispute had accompanied Biden during his visit to Japan. The President was regularly informed in Hiroshima about the status of the negotiations. Because of the dispute, his participation in the G7 summit was at times even on the brink. Biden eventually canceled a planned visit to Papua New Guinea and Australia to return directly to Washington from Hiroshima on Sunday.
It’s also about millions of jobs
On his return trip to Washington, Biden called McCarthy on the way after the Republican asked the President to speak. McCarthy called the conversation “productive.” At the weekend he again accused the government of moving away from an agreement. The “socialist wing of the Democrats” controls the party, he said.
According to US Treasury Secretary Janet Yellen, the world’s largest economy could default on June 1st. The US would then no longer be able to settle most of its bills. Millions of people could lose their jobs as a result. In 2011, a Republican majority in Congress delayed raising the debt ceiling. At that time, the US credit rating was downgraded for the only time in history.
Source: Stern
I have been working in the news industry for over 6 years, first as a reporter and now as an editor. I have covered politics extensively, and my work has appeared in major newspapers and online news outlets around the world. In addition to my writing, I also contribute regularly to 24 Hours World.
