The negotiations for US debt default remain uncertain, but President Joe Biden continues to maintain optimism while warning that he will not accept extreme Republican demands, as reported by AFP on Saturday.
During his discussion with journalists at the G7 summit in Japan, Joe Biden stated that he still believes that they could avoid defaulting and achieve something good.
There have been no signs of resolution to the political dispute in the US capital after the Treasury Department issued the warning that the US government could run out of money by June 1, presenting economic implications on a global level.
As the House of Representatives is under Republican control, they are asking for considerable budget cuts in exchange for an extension of the government’s borrowing authority.
The White House is hoping to decrease Republican demands while emphasizing that the annual debt ceiling increase should not be used for political gain, as it is usually uncontroversial.
On Friday, it appeared unlikely that they could reach a settlement, House Speaker Kevin McCarthy declared that they needed to pause since they could not spend more money the following year.
However, the talks resumed a few hours later, and the White House Press Secretary, Karine Jean-Pierre, announced that they are, in fact, optimistic.
The White House announced that President Biden, who is currently in Japan, was kept informed of the situation early Saturday.
Ben LaBolt, the Director of Communications for Biden, said, “Republicans are taking the economy hostage and pushing us to the brink of default, which could cost millions of jobs and tip the country into recession after two years of steady job and wage growth.” He added, “There remains a path forward to arrive at a reasonable bipartisan agreement if Republicans come back to the table to negotiate in good faith.”
The US government requires additional borrowing to pay for current expenses, but the Republicans’ refusal to increase the debt ceiling means that Washington cannot pay its bills, leading to several economic crises.
Republicans refuse to accept the over $31 trillion in national debt, and they insist on finding ways to balance the budget before authorizing a significant debt allowance.
Democrats assert that they are willing to discuss the budget, but first, they need to raise the debt ceiling unconditionally to pay the existing bills and maintain the US’s financial credibility.
Biden’s team claims that the Republican’s spending cuts are part of their dominant hard-right agenda, which would result in significant job losses and weakened social safety nets while continuing to extend tax breaks to the wealthy.
The White House, on the other hand, proposes raising taxes on the wealthy to increase revenue and accepting more limited spending cuts.
When addressing journalists, President Biden expressed his willingness to exercise patience, stating that negotiations progress in stages. When asked if he is worried, he replied, “Not at all.”
On Sunday, the US President will leave Japan for Washington D.C., cutting short his trip that was meant to include Papua New Guinea and Australia next week.