discussions resume, but disagreements persist 10 days from potential default

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US President Joe Biden met with House Republican Leader Kevin McCarthy to discuss raising the US debt ceiling. A resumption of the dialogue necessary to avoid a payment default.

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The leader of the Republicans in the House of Representatives Kevin McCarthy during a press conference in Washington (United States), May 22, 2023. (CHIP SOMODEVILLA / GETTY IMAGES NORTH AMERICA / AFP)

There are only ten short days left. While the threat of an American default hovers, Joe Biden and opposition leader Kevin McCarthy wanted to believe Monday, May 23, in a way out of the crisis, but their disagreements have not yet been overcome. Treasury Secretary Janet Yellen recalled that he was “very probable” that the United States finds itself short of public money after June 1st. A situation that forces the Democrats, who control the presidency and the Senate, to negotiate with the Republicans, in force in the House of Representatives.

THE “debt ceiling”, greater than $31 trillion – a world record – was reached several months ago, but the federal government has so far managed the situation through accounting arbitrations. In the event of default, the United States would no longer be able to repay the holders of Treasury bonds, this investment king of global finance. The government could also no longer pay certain salaries of civil servants, nor pensions for veterans, among others. The consequences for the US and global economy would be catastrophic, many economists warn.

A debate around the reduction of public spending

“I just completed a productive meeting” with the Republican boss of the House of Representatives, explained the American president in a press release, calling for negotiations “toin good faith” to find a budgetary compromise. Kevin McCarthy, after a tete-a-tete in the Oval Office, told him that “the tone tonight was better than all the previous times”. This summit meeting aimed to relaunch the discussions, which had frankly turned sour this weekend, in the absence of Joe Biden. The Republicans require, to give their green light, a sharp reduction in public spending. Joe Biden, who is campaigning for re-election in 2024 on a social justice pledge, opposes it.


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