Disagreements run deep between Democrats and Republicans over the US debt ceiling, the US Treasury secretary said on Monday, insisting on the need to find a “compromise”, on the eve of a meeting at the White House between Joe Biden and the Republican opposition.
“Clearly, the gap is huge between the position of the president and that of the Republicans,” said Joe Biden’s Minister of Economy and Finance, interviewed on the CNBC channel.
Despite these disagreements, “we need to have discussions and compromises on fiscal policy, total spending and what the spending is for,” she said.
“It is in the normal budgetary process and the president hopes to establish a process of discussion and compromise on these issues,” added Janet Yellen.
She did, however, indicate that Joe Biden, was “not willing to do it with a gun to his head, let alone […] on the temples of the American people,” referring to pressure from Republicans for drastic spending cuts.
Joe Biden will receive Democratic and Republican congressional leaders at the White House on Tuesday to try to reach an agreement to raise the debt ceiling, and thus avoid the catastrophic and unprecedented scenario of a payment default by the United States.
A ceiling is legally set on the country’s public debt and can only be raised by a vote in Congress. Without this, the country can no longer meet its financial commitments, which could happen from the 1er June.
The House of Representatives, with a Republican majority, adopted, at the end of April, a bill providing for a strict framework for public expenditure in exchange for an increase in the ceiling.
But the text has no chance of being adopted as it stands in the Senate, with a Democratic majority and US President Joe Biden had so far refused to negotiate.
“If Congress does not raise the debt ceiling, the president will have to make decisions about the use of available resources. And there are a variety of different options, but there is no right option […] other than raising the debt ceiling,” insisted the minister.