Washington silent as US debt ceiling deadline approaches.

The negotiators of the White House and congressional Republicans on raising the $31.4 trillion federal debt ceiling were silent on Saturday after Friday meetings failed and the president Joe Biden said in Japan that he believed a default could be avoided.

There were no meetings scheduled for Saturday, Punchbowl News said on Twitter, citing multiple sources.

A second meeting broke down on Friday with neither side citing progress and with negotiators saying they were unsure when further meetings would take place. There are less than two weeks to go until June 1, when the Treasury Department has warned that the federal government may be unable to pay all of its debts.

That would trigger a default that could throw financial markets into chaos and send interest rates skyrocketing.

Biden said in Japan late Friday Washington time that he continued to believe a default could be avoided.

“I still believe that we can avoid a default and that we will manage to do something decent”, Biden told reporters in Hiroshima, Japan, where he is attending a meeting of leaders of the Group of Seven rich countries.

Biden was optimistic despite the fact that the White House He acknowledged that there are still “serious differences” with the Republicans, who control the House of Representatives.

House Speaker Kevin McCarthy has said that progress is needed to change the “trajectory” of US government deficit spending and rapidly rising debt.

Republicans are pushing for deep spending cuts in exchange for raising the government’s self-imposed borrowing limit, a move regularly needed to cover the costs of spending and tax cuts previously approved by lawmakers.

Republicans control the House by a narrow margin, while Biden’s Democrats hold a slim majority in the Senate, making it difficult to reach a deal that passes both houses.

Democrats have been pushing to keep spending at this year’s levels, while Republicans want to return to 2022 levels. A plan passed by the House last month would cut a wide swath of public spending by 8% a year. next.

Democrats say that would force average cuts of at least 22% in programs like education and law enforcement, a figure that top Republicans have not disputed.

Source: Reuters

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