On May 25, US President Joe Biden had a "constructive" conversation with US House Speaker Kevin McCarthy about an agreement to raise the debt ceiling.
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| US President Joe Biden and US House Speaker Kevin McCarthy discuss an agreement to reach the debt ceiling on May 22, at the White House. (Source: Reuters) |
In the latest development, Republican negotiators are said to have abandoned plans to increase the defense budget and cut other non-defense spending, and instead support the White House’s effort to increase the budget in both areas in a more balanced way, a source said.
The two sides continued to negotiate this matter on the afternoon of May 25 (local time).
Specifically, the agreement to raise the US debt ceiling to $31.4 trillion specifies the budget that the government can spend on other programs such as housing and education. Currently, the two sides' target numbers are $70 billion apart, with the final figure expected to reach $1 trillion.
The two parties have been deeply divided over how to reduce the federal budget deficit, with Democrats arguing that high-income earners and businesses should pay more in taxes, while Republicans want to cut spending.
But even if the two sides reach agreement, the proposal will still need to pass the US Senate and House of Representatives before being signed into law by President Biden, so it will depend on consistent bipartisan support.
Against that backdrop, it is unclear whether the two sides can reach an agreement before June 1. The Biden administration has raised the possibility of using a provision in the 14th Amendment that allows the President to raise the debt ceiling.
For their part, experts warn that the US government's default would lead to serious consequences for the country in particular and the global economy in general.
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