After a pause that lasted several hours, Republican leaders from within Congress resumed discussions with the White House, hoping to reach a final agreement on raising the debt ceiling ahead of schedule, House Speaker Kevin McCarthy announced.
An official inside the White House said that the agreement “is still possible between the various parties, provided that discussions are conducted with good intentions and a true desire to reach understandings.”
In an interview with “Sky News Arabia”, a member of the US Democratic Party, Mahdi Afifi, expected a “close breakthrough” to the debt crisis, pointing to the possibility of President Joe Biden using a constitutional text that would allow him to act alone to resolve the crisis, without returning to Congress.
Hopes pinned on the talks
- According to Afifi, the leaders of the US Congress are currently in intensive discussions with officials in the White House to try to find a solution to the debt ceiling crisis as soon as possible.
- The two sides seem keen to reach an agreement soon, although the state of disagreement still exists.
- Recently, the possibility of using Article 14 of the US Constitution, which allows the president to act without consulting Congress, has been hinted at.
- However, the current state of bickering between the Democratic and Republican parties may hinder this option, for fear of falling into new political and judicial disputes.
- The Republicans are currently trying, according to Afifi, “to use the status quo in order to achieve political gains by pressuring Biden and the Democratic leaders, to obtain concessions on other issues.”
- Attempts to put pressure on the part of the Republicans may hinder a solution soon during the next few days, but it is expected that the matter will be addressed and that solutions will come before the beginning of next month.
What does it mean to fail to reach an agreement?
- US economic analyst Derbel Jordan predicted that “if Democrats and Republicans do not agree to allow the United States to borrow more, the world’s largest economy will default on its $31.4 trillion debt.”
- L. Simon French, chief economist at the investment bank “Panmure Gordon,” described the matter in the event that America failed to reach an agreement, as it would be “closer to economic chaos,” referring to “the imminent collapse of the global banking industry in 2008.”
- French stressed that “if the United States does not succeed in raising its debt ceiling, it will not be able to borrow more money, and soon the money will run out by paying public interest and other obligations.”
Biden’s optimism
On Saturday, the US President expressed his “optimism” about the possibility of reaching a solution to the public debt ceiling crisis.
“I still think we’ll be able to avoid default,” Biden told reporters at the G7 summit in Hiroshima, Japan.
Reasons for disagreement
- Republicans require that Biden agree to a significant cut in budget expenditures, in return for their agreement to raise the debt ceiling, ignoring the Democrats’ repeated demand for an unconditional increase in the public borrowing ceiling.
- Democrats have accused Republicans of using “excessive tactics to advance their political agenda” before when the US will start defaulting on its debt, as the government runs out of money.
- White House spokeswoman Karen Jean-Pierre said, “Negotiators will continue to work toward a reasonable solution, to avoid default,” adding, “We remain optimistic.”
- The two sides have little time to reach an agreement to raise the federal government’s borrowing limit, or risk a catastrophic default.
- The US Treasury warned that “the government may not be able to pay all its obligations by the first of June.”
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