(Washington) The threat of a US default escalated on Friday, after a “pause” in debt ceiling negotiations between the White House and the Republican opposition, due to deep disagreements.
“We need to take a break,” said House Republican leader Kevin McCarthy, responding to reporters in Congress.
On Friday, he left the negotiating table with Republican Representatives Garret Graves and Patrick McHenry. And they have no plans to return, according to Punchbowl News, a political news newsletter.
“The differences are great on many subjects,” lamented Patrick McHenry, quoted by the NewsNation site.
A few moments earlier, it was the White House which had admitted to stumbling over “real differences” with the Republican opposition and indicated that the discussions were “difficult”.
The negotiations are taking place in the absence of President Joe Biden, who is in Japan for the G7 meeting, and is due to return on Sunday.
The optimism of the last few days seems to have fizzled, while the Democratic administration and the Republican opposition are engaged in a race against time to avoid a default on payment by the United States.
PHOTO MANDEL NGAN, AGENCE FRANCE PRESSE
House Republican Leader Kevin McCarthy
This could happen from 1er June, with potentially catastrophic consequences for the US economy, and even the world.
But Republicans are calling for budget cuts before giving a green light to raising the debt ceiling.
The sticking point: the Republicans’ demand to cut federal spending, to bring it back to 2022 levels. That is, cut $130 billion in spending.
“We can’t spend more money next year,” said Kevin McCarthy.
A red line that the Democrats refuse to cross.
The Biden administration has meanwhile pushed to extend the borrowing limit until 2025, according to US media citing officials involved in the talks.
The Democrats want to believe that an agreement remains possible if the two parties agree not to obtain satisfaction on all the demands, according to a source close to the discussions.
” Hurry up ”
And again, both sides blame each other.
“It is high time for the White House to get serious. Time is running out,” tweeted Mitch McConnell, Senate Republican Minority Leader, accusing Joe Biden of waiting months before agreeing to negotiate with Kevin McCarthy.
Congressional Democrats, meanwhile, are expressing growing concern over demands from Republicans to impose tougher work requirements on recipients of certain welfare benefits.
“Republicans are threatening to crash our economy unless we cut Medicare, evict thousands of people from their public housing, and put nearly ONE MILLION Americans out of work,” lamented elected Democrat Nanette Barragan, in a tweet.
And to add that “their plan puts politics before human beings”.
On Wall Street, the stock market which was confident Friday morning after the optimistic comments of the day before, turned red in the middle of the session. The Dow Jones index ended the day down 0.33%, and the NASDAQ 0.24%.
President Joe Biden is due to return from Japan to Washington on Sunday. He had expressed Thursday his hope to complete an agreement in principle with the Republican opposition.
Kevin McCarthy had expressed optimism that a bill could be presented by next week, but he had indicated that it would take an agreement in principle by Sunday or Monday.
Republicans in the House of Representatives voted on April 26 a bill providing for an unprecedented cut in public spending in exchange for a suspension of the debt ceiling until the end of March 2024, paving the way for another crisis of debt in the midst of the presidential election campaign.