US debt ceiling: Biden and McCarthy resume talks

Deutsche Welle

Posted at May 23 2023 07:04 AM

Republican lawmaker Kevin McCarthy said on Monday that talks over raising the US federal government's debt ceiling were "on the right path."

McCarthy, who is the speaker of the House of Representatives, made the comments hours ahead of a meeting with President Joe Biden.

"I firmly believe what we're negotiating right now, a majority of Republicans will see that it is a right place to put us on the right path," McCarthy told reporters.

"We do have disagreements (but) I think at the end of the day we can find common ground," he stressed.

Biden said he was "optimistic we're going to make some progress" as talks began. He added that both sides understood that they have a "significant responsibility" to reach an agreement.

The federal government currently has a borrowing limit of $31.4 trillion (€29 trillion).

Biden has warned that any default could have "catastrophic" consequences.

What is the deadline on a debt ceiling deal?

McCarthy and Biden have 10 days to reach a deal to increase the debt ceiling.

Any agreement to raise the ceiling must pass both chambers of Congress. The Republicans control the House 222-213, while Biden's Democrats have a slim 51-49 majority in the Senate.

It will take several days for Congress to deliberate and pass any legislation born out of a possible deal between Biden and McCarthy.

"We can get a deal tonight. We could deal tomorrow but you got to get something done this week to be able to pass it and move it to the Senate," McCarthy said.

Treasury Secretary Janet Yellen warned that it is "highly likely" that the government department will no longer be able to pay all obligations by early June if the debt ceiling is not raised.

What Republicans want in exchange for a deal<

A White House official said on Monday that Republican negotiators had proposed cuts to food aid programs.

Republicans have also proposed a reduction in COVID-19 aid approved by Congress and work requirements for some programs for people with low incomes. Lawmakers in the party aim to bring spending down to 2022 levels.

Biden said that the last offer made by Republicans was "unacceptable." He said that he would not support oil subsidies and "wealthy tax cheats" while reducing food aid and healthcare spending.

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