No agreement was reached on Tuesday, after a meeting at the White House between Joe Biden and the Republican opposition, to raise the debt ceiling and avoid an unprecedented default by the United States, with potentially catastrophic consequences.
There remains “a lot of work” before the two parties can reach an agreement, Kevin McCarthy, Republican leader of the House of Representatives, held by a narrow conservative majority, told the press after the meeting.
It is on him that the short-term financial destiny of the United States largely depends.
Less than an hour earlier, at the start of the meeting, Joe Biden, Vice President Kamala Harris and the four Democratic and Republican congressional leaders had posed for photographers in the Oval Office.
A sign that the discussions remain very difficult, the American president will shorten a major diplomatic tour in Asia-Pacific to devote himself to these difficult discussions on the public debt, two sources familiar with the matter told AFP on Tuesday.
He should, thus, leave as planned Wednesday for the G7 summit in Japan, but will return directly afterwards, giving up going to Papua New Guinea and Australia.
In the context of a presidential campaign, and generally of great political tension, neither the American president, candidate for a second term, nor the conservative tenor, wants to be the one who will blink first.
The White House has multiplied warnings about a possible default, a situation in which the federal state would be unable to pay a single penny, whether it is to pay salaries, pay benefits social, repay its creditors.
Letter of 140 pd-g.
It would be “catastrophic” and “devastating for America and, to put it bluntly, the whole world,” Joe Biden said in a video posted on Twitter ahead of the meeting.
Kevin McCarthy had declared Monday evening, while the teams of the two camps have been negotiating for a week: “There is no movement. »
“We have to do something by the end of the week, and we’re not close at all,” he added.
This unprecedented scenario of an American payment default threatens from the 1er June if no agreement is found in Congress to raise the authorized public debt ceiling.
“We urge that an agreement be reached quickly so that the country can avoid this potentially devastating scenario”, urge more than 140 CEOs. American companies, including those of the giants Pfizer, Morgan Stanley, or even Goldman Sachs, in an open letter sent Tuesday to the White House and to congressional officials.
The parliamentary calendar further complicates the matter. The House of Representatives and the Senate, which together make up Congress, and which must likewise vote on the debt, do not sit at the same time, until 1er June, only for four days.
The US Congress must regularly – this is specific to the country – raise the maximum public debt ceiling.
However, the Republicans of Kevin McCarthy refuse to vote in this direction as long as Joe Biden will not accept significant budget cuts.
Several options
Officially, the White House refuses to negotiate on raising the debt ceiling, long a routine procedure and which, according to Joe Biden, should not be politicized since the debt has been accumulated by governments on both sides.
But, in reality, several options are on the table.
Republicans and Democrats could thus agree that several tens of billions of dollars planned to respond to the COVID-19 pandemic, but never used, be canceled, so as to reduce public spending.
Also under discussion, according to the American press: the allocation of permits in the energy sector, and the tightening of the conditions for the allocation of certain social benefits.
This last option arouses the indignation of some elected Democrats on the most left, for example Senator Elizabeth Warren, who denounced Tuesday in the Capitol “a pure and simple attempt to deprive people of benefits on which they depend to survive. »