President Joe Biden said he was “confident” on Wednesday in obtaining an agreement on the debt ceiling, assuring that a default by the United States will be avoided.
During a brief intervention at the White House before leaving for Japan, where he will participate in a G7 summit, Joe Biden clarified that the congressional officials with whom he had a meeting on Tuesday “agreed to avoid default of payment” from the United States.
“I have confidence that we are going to have an agreement on the budget and that America is not going to default,” the president said, repeating that such a default would be “catastrophic for the American economy and the people. American”.
“We are going to reach an agreement because there is no other alternative than to do what is necessary for the country”, continued the president, adding that the negotiations were “in fact on the lines of the budget and not on the idea of whether or not we should repay our debts”.
Budget cuts
On this budgetary point, and while the Republicans are calling for spending cuts, the Democratic president repeated that he was not ready to accept compromises “which would have an impact on the health benefits” of Americans.
Joe Biden was referring to a Republican bill that seeks to remove access to Medicaid – health insurance for the poorest – to those who do not work and which is one of the sticking points in the negotiations.
The president also clarified that he had “shortened” his trip to Asia after the G7 “in order to be there for the final negotiations and to sign an agreement with Congress officials”.
Joe Biden has thus canceled his diplomatic tour of Papua New Guinea and Australia.
He added that he would remain “in close contact” with House Republican Leader Kevin McCarthy and would hold a press conference on Sunday.
For his part, Kevin McCarthy declared himself Wednesday “optimistic about the ability to work together”.
The day before, he had praised “an improved process” in the conduct of the discussions when the White House sent two senior officials to deal directly with Republican leaders.
On Tuesday, a meeting was held at the White House with these congressional leaders in order to obtain a green light for raising the debt ceiling and thus avoid a default on payment by the United States, which, without an agreement, could occur in two weeks.
Congress has the prerogative to authorize the United States, the world’s largest borrower, to issue more debt by raising the limit on its borrowing, which today stands at more than 31 trillion dollars, an amount greater than to their gross domestic product (GDP).
On Wall Street, investors clearly welcomed these declarations of confidence in the debt showdown that has darkened the economic horizon for weeks. The Dow Jones index gained 1.11% and the Nasdaq 0.88% in the middle of the session.