London Daily

Focus on the big picture.
Friday, Jul 11, 2025

Biden and McCarthy seek to break debt ceiling impasse

Biden and McCarthy seek to break debt ceiling impasse

President Joe Biden and top Republican Kevin McCarthy have spoken on the phone, in a change of tone in stalled talks on lifting the US debt ceiling.
McCarthy said his call with Biden, who was returning from the G7 summit in Japan, had been “productive” and the two would meet on Monday.

The two sides remain at odds over budget cuts demanded by the Republicans as a condition for raising the ceiling. Failure to do so by June could result in the US defaulting on its debt.

That would mean the federal government could not borrow more money or pay all its bills. The Treasury Department has warned that a default could begin on June 1.

Such an outcome would cause chaos in financial markets and lead to further rises in interest rates.

As he left Japan on Sunday, Biden told reporters that proposals by Republicans — who control the House of Representatives — were “simply, quite frankly, unacceptable”.

He added: “It’s time for Republicans to accept that there is no bipartisan deal to be made solely, solely on their partisan terms. They have to move as well.”

But Biden also said would be willing to cut spending to reach a deal and he would speak McCarthy on his way home.

The president cancelled foreign visits that were due to follow the three-day summit in Hiroshima, in order to deal with the impasse over the federal debt.

After the call, McCarthy told reporters the discussions had been positive. “I think we can solve some of these problems if he understands what we’re looking at,” he said.

A White House official said staff members from both sides would meet this evening “to discuss remaining issues”.

Meanwhile, Treasury Secretary Janet Yellen said on Sunday that 1 June remained a “hard deadline”. She told NBC that without a deal “we expect to be unable to pay all of our bills in early June”.

Failure to lift the ceiling could see the US suspend its social insurance payments and the salaries of federal and military employees. Default also threatens to wreak havoc on the global economy, affecting prices and mortgage rates in other countries.

The impasses has rattled financial markets. On Friday the Dow ended down 0.3%, the S&P 500 dipped 0.1% and the Nasdaq slipped 0.2%.

In exchange for support for raising the debt ceiling, Republicans are demanding budget cuts to the tune of $4.5 trillion, which includes scuppering several of Biden’s legislative priorities.

The White House has called the Republican proposal “a blueprint to devastate hard-working American families”, although it has indicated that it may make some budgetary concessions.

Both President Biden and McCarthy are under pressure from the left and right flanks of their respective parties to hold the line.

With a one-seat Democratic majority in the Senate and Republicans in narrow control of the House, a deal has so far proven elusive.
Newsletter

Related Articles

0:00
0:00
Close
Grok Chatbot Faces International Backlash for Antisemitic Content
Severe Heatwave Claims 2,300 Lives Across Europe
NVIDIA Achieves Historic Milestone as First Company Valued at $4 Trillion
Declining Beer Consumption Signals Cultural Shift in Germany
Linda Yaccarino Steps Down as CEO of X After Two Years
US Imposes New Tariffs on Brazilian Exports Amid Political Tensions
Azerbaijan and Armenia are on the brink of a historic peace deal.
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Weinstein Victim’s Lawyer Says MeToo Movement Still Strong
U.S. Enacts Sweeping Tax and Spending Legislation Amid Trade Policy Shifts
Football Mourns as Diogo Jota and Brother André Silva Laid to Rest in Portugal
Labour Expected to Withdraw Support for Special Needs Funding Model
Leaked Audio Reveals Tory Aide Defending DEI Record
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
London Stock Exchange Faces Historic Low in Initial Public Offerings
A new online platform has emerged in the United Kingdom, specifically targeting Muslim men seeking virgin brides
Trump Celebrates Independence Day with B-2 Flyover and Signs Controversial Legislation
Boris Johnson Urges Conservatives to Ignore Farage
SNP Ordered to Update Single-Sex Space Guidance Within Days
Starmer Set to Reject Calls for Wealth Taxes
Stolen Century-Old Rolls-Royce Recovered After Hotel Theft
Macron Presses Starmer to Recognise Palestinian State
Labour Delayed Palestine Action Ban Over Riot Concerns
Swinney’s Tax Comments ‘Offensive to Scots’, Say Tories
High Street Retailers to Enforce Bans on Serial Shoplifters
Music Banned by Henry VIII to Be Performed After 500 Years
Steve Coogan Says Working Class Is Being ‘Ethnically Cleansed’
Home Office Admits Uncertainty Over Visa Overstayer Numbers
JD Vance Questions Mandelson Over Reform Party’s Rising Popularity
Macron to Receive Windsor Carriage Ride in Royal Gesture
Labour Accused of ‘Hammering’ Scots During First Year in Power
BBC Head of Music Stood Down Amid Bob Vylan Controversy
Corbyn Eyes Hard-Left Challenge to Starmer’s Leadership
London Tube Trains Suspended After Major Fire Erupts Nearby
Richard Kemp: I Felt Safer in Israel Under Attack Than in the UK
Cyclist Says Police Cited Human Rights Act for Riding No-Handed
China’s Central Bank Consults European Peers on Low-Rate Strategies
AI Raises Alarms Over Long-Term Job Security
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Musk Battles to Protect Tesla Amid Trump Policy Threats
Air France-KLM Acquires Majority Stake in Scandinavian Airlines
UK Educators Sound Alarm on Declining Child Literacy
Shein Fined €40 Million in France Over Misleading Discounts
Brazil’s Lula Visits Kirchner During Argentina House Arrest
Trump Scores Legislative Win as House Passes Tax Reform Bill
Keir Starmer Faces Criticism After Rocky First Year in Power
DJI Launches Heavy-Duty Coaxial Quadcopter with 80 kg Lift Capacity
U.S. Senate Approves Major Legislation Dubbed the 'Big Beautiful Bill'
×