London Daily

Focus on the big picture.
Friday, Jun 20, 2025

US debt ceiling: Biden and Republicans hopeful of a deal

US debt ceiling: Biden and Republicans hopeful of a deal

President Joe Biden and Republican leaders have expressed cautious optimism that a deal to raise the US debt ceiling is within reach, following emergency talks at the White House.

But House of Representatives Speaker Kevin McCarthy told reporters the two sides are still far apart.

The standoff has forced Mr Biden to cut short a foreign trip.

Without a deal, the US could enter a calamitous default on its $31.4tr (£25tr) debt as soon as 1 June.

A failure by the US government to meet its debt obligations could trigger global financial chaos.

The Democratic president said Tuesday's hour-long Oval Office meeting was "good, productive", sounding upbeat about the prospects of an agreement.

Mr McCarthy said afterwards he believed a deal was possible by the end of this week.

Asked about the risk of the US falling off a fiscal cliff, the California congressman told BBC News: "The great thing about that question is we've already taken default off the table."

He also told reporters a Biden-appointed representative would negotiate directly with his staff, which he said was a sign that "the structure of how we negotiate has improved".

A number of senior Democrats were at the talks, including Vice-President Kamala Harris, Senate Majority Leader Chuck Schumer and House Minority Leader Hakeem Jeffries.

In exchange for support for raising the debt ceiling, Republican leaders are demanding budget cuts. They also want tougher work requirements on government aid recipients.

Citing sources familiar with the talks, the Associated Press news agency reports that this idea was "resoundingly" rejected by House Democrats at another meeting earlier on Tuesday.

Mr Biden has repeatedly said that a potential debt default and budgetary issues should be separate.


The president is due to fly to the G7 summit in Japan on Wednesday. He was then expected to head to Papua New Guinea and Australia for further meetings.

But he will now return after the 19-21 May summit ends in Hiroshima to "ensure that Congress takes action" to avert a default, the White House said in a statement.

The so-called Quad meeting in Sydney has now been cancelled, and the leaders will attempt to meet on the sidelines of the G7, Australian Prime Minister Anthony Albanese said.

Reaching the debt ceiling would mean the US government is unable to borrow any more money.

This means the government would no longer be able to pay the salaries of federal and military employees. Social Security cheques - payments that millions of pensioners in the US rely on - would stop.

Every so often the US Congress votes to raise or suspend the ceiling so it can borrow more.

A default - which would be a first in US history - could shatter trust in America's political ability to pay its bills.

Experts have warned it could also see the US spiral into recession and trigger a rise in unemployment.

Treasury Secretary Janet Yellen said at an event on Tuesday that "a US default would generate an economic and financial catastrophe".

Meanwhile, White House National Security Council spokesman John Kirby said: "There's countries like Russia and China that would love nothing more than for us to default."

A deal to avoid this scenario has so far proven elusive. In April, Republicans proposed an agreement that would suspend the debt limit by $1.5tn or until 31 March, whichever comes first.

In exchange, they would maintain spending at key government agencies at 2022 levels for the next financial year and limit spending growth to 1% annually over the next 10 years.

They argued this would lead to $4.8tn in savings.

The proposal, however, would scupper several of Mr Biden's legislative priorities, including student loan forgiveness.

The last time the US was approaching a default, back in 2011, lawmakers struck a deal hours before the deadline.

That standoff led to a downgrade in the US credit rating, sent the stock market plummeting and increased the government's borrowing costs.

"Nobody should use default as a hostage," Senate Majority Leader Chuck Schumer said at the US Capitol on Tuesday. "The consequences would be devastating for America."

The US debt ceiling has been raised, extended or revised 78 times since 1960.

Comments

Oh ya 2 year ago
The Reps will fold as they always do. Only about 3 Republicans have a backbone the rest are walking jellyfish

Newsletter

Related Articles

0:00
0:00
Close
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
Iranian Military Officers Reportedly Seek Contact with Reza Pahlavi, Signal Intent to Defect
FBI and Senate Investigate Allegations of Chinese Plot to Influence the 2020 Election in Biden’s Favor Using Fake U.S. Driver’s Licenses
Vietnam Emerges as Luxury Yacht Destination for Ultra‑Rich
Plans to Sell Dutch Embassy in Bangkok Face Local Opposition
China's Iranian Oil Imports Face Disruption Amid Escalating Middle East Tensions
Trump's $5 Million 'Trump Card' Visa Program Draws Nearly 70,000 Applicants
DGCA Finds No Major Safety Concerns in Air India's Boeing 787 Fleet
Airlines Reroute Flights Amid Expanding Middle East Conflict Zones
Elon Musk's xAI Seeks $9.3 Billion in Funding Amid AI Expansion
Trump Demands Iran's Unconditional Surrender Amid Escalating Conflict
Israeli Airstrike Targets Iranian State TV in Central Tehran
President Trump is leaving the G7 summit early and has ordered the National Security Council to the Situation Room
Taiwan Imposes Export Ban on Chips to Huawei and SMIC
Israel has just announced plans to strike Tehran again, and in response, Trump has urged people to evacuate
Netanyahu Signals Potential Regime Change in Iran
Juncker Criticizes EU Inaction on Trump Tariffs
EU Proposes Ban on New Russian Gas Contracts
Analysts Warn Iran May Resort to Unconventional Warfare
Iranian Regime Faces Existential Threat Amid Conflict
Energy Infrastructure Becomes War Zone in Middle East
UK Home Secretary Apologizes Over Child Grooming Failures
Trump Organization Launches 5G Mobile Network and Golden Handset
Towcester Hosts 2025 English Greyhound Derby Amid Industry Scrutiny
Gary Oldman and David Beckham Knighted in King's Birthday Honours
Over 30,000 Lightning Strikes Recorded Across UK During Overnight Storms
Princess of Wales Returns to Public Duties at Trooping the Colour
Red Arrows Use Sustainable Fuel in Historic Trooping the Colour Flypast
Former Welsh First Minister Addresses Unionist Concerns Over Irish Language
Iran Signals Openness to Nuclear Negotiations Amid Ongoing Regional Tensions
France Bars Israeli Arms Companies from Paris Defense Expo
King Charles Leads Tribute to Air India Crash Victims at Trooping the Colour
Jack Pitchford Embarks on 200-Mile Walk to Support Stem Cell Charity
Surrey Hikers Take on Challenge of Climbing 11 Peaks in a Single Day
UK Deploys RAF Jets to Middle East Amid Israel-Iran Tensions
Two Skydivers Die in 'Tragic Accident' at Devon Airfield
Sainsbury's and Morrisons Accused of Displaying Prohibited Tobacco Ads
UK Launches National Inquiry into Grooming Gangs
Families Seek Closure After Air India Crash
Gold Emerges as Global Safe Haven Amid Uncertainty
Trump Reports $57 Million Earnings from Crypto Venture
Trump's Military Parade Sparks Concerns Over Authoritarianism
Nationwide 'No Kings' Protests Challenge Trump's Leadership
UK Deploys Jets to Middle East Amid Rising Tensions
Trump's Anti-War Stance Tested Amid Israel-Iran Conflict
Germany Holds First Veterans Celebration Since WWII
U.S. Health Secretary Dismisses CDC Vaccine Advisory Committee
Minnesota Lawmaker Melissa Hortman and Husband Killed in Targeted Attack; Senator John Hoffman and Wife Injured
Exiled Iranian Prince Reza Pahlavi Urges Overthrow of Khamenei Regime
×