Washington is quiet as the debt ceiling deadline approaches. After Friday’s failure, White House and Republican congressional negotiators on extending the $31.4 trillion debt ceiling remained quiet on Saturday. President Joe Biden said in Japan he felt a default could be avoided.
Negotiators said they weren’t sure when they’d meet again after a second meeting on Friday ended with no progress. The Treasury Department has warned that the federal government may be unable to pay its bills by June 1. A default would disrupt financial markets and raise interest rates.
Biden said in Japan late Friday Washington time that a default may be avoided.
“I still believe we’ll be able to avoid a default and we’ll get something decent done,” Biden told reporters in Hiroshima, Japan, where he is attending a Group of Seven rich countries leaders’ conference.
The White House acknowledged “serious differences” with Republicans, who control the House of Representatives, but Biden sounded optimistic.
House Speaker Kevin McCarthy said the movement was needed to change the “trajectory” of U.S. government deficit spending and rapidly expanding debt.
Republicans want deep expenditure cutbacks in exchange for a rise in the government’s self-imposed borrowing limit, which is needed regularly to pay for spending and tax cuts legislators approved.
It’s hard to compromise with Republicans in the House and Biden’s Democrats in the Senate.
Republicans want spending to return to 2022, while Democrats want to maintain this year’s levels. Last month’s House bill would eliminate 8% of government spending next year.
Top Republicans agree with Democrats that that would decrease education and law enforcement by at least 22%.
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