If Congress does not raise the US debt ceiling by then, the country could default on its loans, in a potentially catastrophic event for global financial markets.
A White House meeting with Republican negotiators ended Friday with no progress amid a major disagreement between the two sides that led to a stalemate in talks, alarming financial markets ahead of the maturity to avoid default.
But Republican Kevin McCarthy, speaker of the U.S. House of Representatives, said Republican members of the House had resumed negotiations with President Joe Biden’s Democratic administration on raising the government’s borrowing limit. federal $31.4 trillion.
The White House confirmed the resumption of negotiations, but said there were still serious differences with Republican negotiators in the debt ceiling talks, indicating that the talks will remain difficult as the two sides seek to achieve to an agreement.
On Saturday, US President Joe Biden said he was optimistic that a solution to the public debt ceiling crisis could be found.
“I still think we can avoid default,” Biden told reporters at the G7 summit in Hiroshima.
Reasons for disagreement
Republicans are demanding that Biden agree to a significant reduction in budget spending in return for agreeing to raise the debt ceiling, ignoring repeated Democrats’ demand for an unconditional increase in the public borrowing limit.
Democrats accused Republicans of using excessive tactics to advance their political agenda ahead of when the United States would start defaulting on debt because the government was running out of money.
White House spokeswoman Karen Jean-Pierre told reporters in Japan, where Biden is attending a meeting of G7 leaders, that negotiators will continue to work toward a reasonable solution to avoid default.
“We remain optimistic,” she added.
The two sides have little time to reach an agreement to raise the federal government’s borrowing limit or risk a catastrophic default. And the Treasury has warned that the government may not be able to pay all of its obligations by June 1.
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