Biden cuts short Asia trip to meet McCarthy as Treasury Secy warns June 1 'hard deadline' to raise US debt ceiling
The US government could run out of money and default on its $31 trillion debt as early as June 1 if Congress does not authorise more borrowing
June 1 remains a “hard deadline” for raising the federal debt limit, said US Treasury Secretary Janet Yellen.
She warned that unless the standoff with Republicans in Congress is resolved, there is a low possibility that the Joe Biden-led US government will be able to pay its bill through June 15, when more tax receipts are due.
The US government could run out of money and default on its $31 trillion debt as early as June 1 if Congress does not authorise more borrowing.
For the unversed, Republicans control the House of Representatives in the US.
In NBC’s Meet the Press, the US Treasury Secretary said: “We expect to be unable to pay all of our bills in early June, and possibly as soon as June 1st.”
“I indicated in my last letter to Congress that we expect to be unable to pay all of our bills in early June and possibly as soon as June 1. And I will continue to update Congress, but I certainly haven’t changed my assessment. So I think that that’s a hard deadline,” she added.
For weeks now, the White House and Republican legislators have been in intense negotiations with increasingly hard-right Republican party putting pressure on heavy spending cuts in exchange for raising the debt limit.
With less than two weeks remaining until June 1, US President Joe Biden will meet House Republican Speaker Kevin McCarthy on Monday to discuss the debt ceiling.
“Our teams are talking today and we’re setting (sic) to have a meeting tomorrow (Monday). That’s better than it was earlier. So, yes,” said McCarthy.
Biden and McCarthy held a “productive” phone call on Sunday that lasted about two-and-a-half hours.
The first in US history
A default, that would be first in the US history, would trigger devastating consequences for the world economy, the White House said.
Concerns about default are also heavily weighing on markets as a surge in the government’s self-imposed borrowing limit is needed regularly to cover costs of spending and tax cuts previously approved by lawmakers.
On Friday, the US was forced to pay record-high interest rates in a recent debt offer.
Talking to media in Japan, Biden said he believed he had the authority to invoke the 14th Amendment to the US Constitution to raise the debt ceiling without Congress, but said it was unclear that enough time remained to try to use that untested legal theory to avoid default.
The US President has refused to yield to demands of Republicans, accusing his opponents of putting the economy of the country at risk for political scoring.
He also slammed Republican demands as “unacceptable” but said a solution can still be found before a default.
Biden had planned to travel to Japan, Papua New Guinea and Australia, but had to cut short his trip due to the debt talks.
With inputs from agencies
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