(Washington) The political calendar became a little more complicated on Thursday with regard to the risk of a default by the United States, with the postponement until next week of discussions at the highest level.
A scheduled Friday meeting on public debt between Joe Biden and Republican House boss Kevin McCarthy, and other House leaders, has been pushed back to “early next week”, a spokesperson for the House of Representatives said Thursday. White House.
This postponement is “positive”, assured a source close to the discussions, “the teams are continuing their meetings and it was not the right time to involve the leaders” at the highest level.
“The White House did not cancel the meeting, we all decided that it was in our interest to let our teams meet again before we meet again”, declared Kevin McCarthy, during a press conference.
Joe Biden has “no plan”, “apparently he does not want an agreement, he wants a default”, said the conservative tenor again.
The US Treasury has indicated that the White House is at risk from 1er June of no longer being able to meet its financial obligations.
Until then, the House of Representatives, which must vote to raise the maximum amount the United States is allowed to borrow, will only be in session for eight days.
And Joe Biden is supposed to be away, in less than a week, for a diplomatic tour of several days in Asia – he has however indicated that he will give up if the blockage persists.
The IMF expressed concern on Thursday of the “serious repercussions” on the world economy that a default by the United States would have.
Democrats and Republicans are engaged in a showdown over raising the US debt ceiling, accusing each other of taking the world’s largest economy “hostage”.
This legislative maneuver is essential so that the world’s largest economy can continue to borrow and pay its bills, its officials and its creditors.
Former President Donald Trump joined the debate by urging Republicans, over whom he retains immense influence, on Wednesday to “cause a default” if Democrats do not agree to “massive cuts” in spending.
Joe Biden, for his part, is calling for an unconditional increase in the debt ceiling, arguing that for a very long time, including under the presidency of his predecessor, Congress had voted in this direction without any particular debate.
Unemployment and recession
The American president had already brought together the Democratic and Republican leaders of the Senate and the House of Representatives, including Kevin McCarthy, on Tuesday, without finding a solution.
Merely flirting with the idea of a default can “cause significant economic costs,” Treasury Secretary Janet Yellen warned Thursday.
“The mere threat of default can lead to a downgrade in our financial rating and weakened consumer confidence,” with interest rate hikes on credit, she added.
The White House assures that in the event of an American default, a situation that has never happened, unemployment would soar and the American economy would collapse almost instantly.
The political stakes for the main protagonists, Joe Biden and Kevin McCarthy, are high.
The first, at 80, is a candidate for re-election and is unable to boost his low popularity rating.
The second, elected with difficulty at the head of the lower house by a slim majority, must consolidate his position.
The US debt ceiling is currently set at some $31 trillion – the record for all sovereign debt in the world in absolute terms.
This amount was reached in mid-January, but the federal government has so far managed the situation through accounting manoeuvres.