Reassurance amid countdown to debt ceiling talks: Biden and GOP leaders say no default

Source: Wall Street News

Author: Li Dan

There are just two weeks to go before the earliest possible default, which the U.S. Treasury Secretary has warned. Biden said Wednesday he is confident a budget will be agreed. Republican House Leader McCarthy did not directly say that he was optimistic about the situation in the debt negotiations, but said that he was encouraged by Biden's willingness to negotiate. House Democrats began gathering signatures in an attempt to bypass McCarthy and push directly for a debt ceiling vote.

As the debt ceiling negotiations are in full swing and the deadline for triggering the earliest default is getting closer, both US President Biden and Republican House leader McCarthy are trying to reassure people, trying to dispel concerns that the debt ceiling may trigger a default.

On the morning of Wednesday, May 17, US Eastern Time, House Speaker McCarthy told the media clearly: "I don't think that, in the final analysis, we will not have a debt default." McCarthy did not directly say that he is optimistic about the situation of debt negotiations, but said that , he was encouraged by Biden's willingness to negotiate.

Since then, before leaving for a visit to Asia, Biden also expressed at the White House that he would not allow the US government to default, saying that he was "confident that we will reach an agreement on the budget, and the United States will not default." "We will come together because there is no choice. Every leader in the (negotiating) room understands the consequences of failure," he said.

"The only thing I'm confident about is that now we have a structure to find a way to come to a conclusion," McCarthy said.

House Democratic leaders Jeffries and McCarthy, who were also interviewed Wednesday morning, agreed that negotiations were moving forward, but kept their positions.

Jeffries commented that the talks on Tuesday were very positive and frank discussions were held. He is optimistic that the two sides will find common ground in the next week or two.

Jeffries said it would be impossible to meet the Republican demands of working alongside food benefits provided by the federal government, but he remained optimistic about negotiations. McCarthy said work requirements are a responsible thing, they only apply to able-bodied people without supporters and supporters, and Biden voted for them when he was a senator.

The media said that although the White House made it clear that it opposed the introduction of work requirements in the health insurance project Medicaid, officials did not rule out that Biden would be willing to discuss stricter work requirements for the provision of food stamps and the Temporary Assistance for Needy Families (TANF) program. .

Biden said ahead of Wednesday's trip that he would not accept "any job request that would affect the health care needs of the people," but said he was confident a budget could be agreed. The media believes that he has left the door open for the introduction of some new regulations.

While Republicans have pushed for jobs requirements, Democrats have been demanding that mechanisms for raising revenue be discussed in debt negotiations. McCarthy said on Wednesday that the debt-ceiling talks would not discuss taxes, something Biden acknowledged on Tuesday.

Also Wednesday, Democrats in the House of Representatives began collecting signatures seeking to raise the debt ceiling through an unconventional means known as a "discharge petition," a parliamentary tactic designed to circumvent the House Republican leadership and force a vote. Initiating this kind of voluntary process can bypass Republican leadership such as McCarthy and directly push for a vote on the debt ceiling bill.

Currently, there are only two weeks to go before the so-called "X date" when U.S. Treasury Secretary Yellen warned that a debt default may come early next month.

Yellen warned in a letter to congressional leaders on the 1st of this month that if Congress fails to raise the debt ceiling or suspend it, the Treasury Department will not be able to continue to meet all the government's obligations by early June, possibly as early as June 1.

Yellen has since repeatedly warned that funding could run out as early as June 1. On Monday and Tuesday, Yellen continued to reiterate the June 1 deadline.

On Tuesday, Yellen also issued her strongest warning yet, saying a default on debt would undermine the foundations on which the U.S. financial system was built, causing a collapse in many financial markets and a global run on panic. A default could leave millions of Americans without income and could lead to a recession that would destroy multiple jobs and businesses.

Wall Street News mentioned that as of Tuesday, the debt ceiling negotiations between the White House and Congress were still at a stalemate, but the participants indicated that some progress had been made.

After Tuesday's meeting, Biden named two top aides -- Office of Management and Budget Director Shalanda Young and senior adviser Steve Ricchetti -- as lead negotiators. Aides said they would hold direct one-on-one meetings with McCarthy and his ally, Rep. Garret Graves.

Biden decided to shorten his trip to the Asia-Pacific on Tuesday. He will return to the United States on Sunday, May 21, canceling his visit to Papua New Guinea and Australia. Economic loss is a crucial step.