US President Joe Biden and House Speaker Kevin McCarthy have held another meeting in the White House about raising the US government’s $US31.4 trillion debt ceiling.
The U.S. economy at risk of crashing if no deal is reached in 10 days.
The Democratic president and the top congressional Republican have struggled to make progress on an agreement, as McCarthy is pressuring the White House to agree to spending cuts in the federal budget that Biden has called “extreme.”
They have until June 1 to increase the government’s self-borrowing limit or trigger an unprecedented debt default that economists warn could bring on a recession.
Biden told reporters as the meeting started that he was “optimistic” they could make some progress. Both sides need a bipartisan agreement to “sell it” to their constituencies, he said, adding there may still be some disagreements.
Treasury Secretary Janet Yellen on Monday offered a sobering reminder of how little time is left, saying the earliest estimated default date remains June 1 and that it is “highly likely” that Treasury will no longer be able to pay all government obligations by early June if the debt ceiling is not raised.
White House aides met with Republican negotiators on Capitol Hill for two hours on Monday, and early indications were that the talks had gone well.
“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.
Any deal to raise the limit must pass both chambers of Congress, and therefore hinges on bipartisan support.
McCarthy’s Republicans control the House 222-213, while Biden’s Democrats hold the Senate 51-49.
A failure to lift the debt ceiling would trigger a default that would shake financial markets and drive interest rates higher on everything from car payments to credit cards.
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