shifted schedule
Debt ceiling talks falter
05/12/2023, 02:16 am
Republicans and Democrats are arguing bitterly about raising the debt ceiling in the USA, putting additional pressure on the global economy. Negotiations between President Biden and the President of the US House of Representatives are adjourned.
Around three weeks before the US was about to default, talks between the Democrats and Republicans on raising the debt ceiling were postponed. US President Joe Biden and the President of the US House of Representatives, Kevin McCarthy, do not want to meet again until the beginning of next week, according to a spokesman for the US President’s Office. The two politicians originally wanted to continue the talks this Friday.
Instead, the employees would first continue their talks, the website “The Hill” quoted a source from the White House as saying. The broadcaster NPR reported that the meeting had been delayed in order not to undo the progress made so far. In order to find a solution to the dispute, Biden had already received the Republican chairman of the US House of Representatives, Kevin McCarthy, on Tuesday. The meeting ended without a result.
Biden had announced a new meeting for Friday and said the debt ceiling was his top priority. The Democrat said he would remain in Washington until “the matter is settled” if the default date fell during a period when he was supposed to be overseas. The G7 summit in Japan, to which Biden plans to travel, is scheduled for next week.
Further risk for the world economy
US Treasury Secretary Janet Yellen warns of a possible government default on June 1st. In the USA, the parliament sets a debt ceiling at irregular intervals and determines how much money the state can borrow. The debt ceiling has now been reached and the US Treasury must tap into capital reserves – because the US is now no longer allowed to take on new debt to pay its bills.
Biden and his Democrats need the Republicans in Congress to raise the debt ceiling. However, they are opposed to an increase without significant savings in certain government spending. The bitter dispute is another risk for the already sluggish world economy. Biden has already warned of a severe recession in the world’s largest economy if there is no agreement.