President Joe Biden was “confident” this Wednesday (17), in which he will reach an agreement to raise the debt limit of the United States and, thus, avoid an unprecedented default on the sovereign debt of the greatest world power.
In a brief statement at the White House before heading to Japan for the G7 summit, Biden said the Republican congressional leaders he met on Tuesday “agreed that we are going to avoid a default”, that is, honor their payments.
“I am confident that we will get the agreement we need on the budget, and the United States will not default,” the president said, repeating that doing so would be “catastrophic” for the economy and the American people.
Biden also confirmed that he cut short his trip to Asia, after attending the G7 summit, in order to be able to be present in the “final negotiations and sign an agreement with congressional leaders”. So he suspended his diplomatic tour of Papua New Guinea and Australia on Tuesday.
– More “productive” meeting –
On Tuesday, Biden met with Republican leaders of Congress at the White House, seeking an understanding to raise the American debt ceiling and avoid the moratorium, which, in theory, could occur in two weeks, starting in June 1st.
After the meeting, Biden said he was “optimistic that there is a path to a responsible bipartisan budget agreement, if both parties negotiate in good faith,” the White House said in a statement.
Kevin McCarthy, leader of the Republican majority that controls the House of Representatives, said, however, that there is “a lot of work” to be done.
McCarthy acknowledged, even so, that the meeting was “a little more productive” than the previous one, last week, and that they adopted an “improved” process for the negotiation.
The meeting lasted less than an hour. Prior to that, Biden, Vice President Kamala Harris and opposition leaders posed for photos in the Oval Office of the White House.
Republicans are in favor of reducing public spending and the fiscal deficit and want to reduce the issue of debt that normally covers this gap.
Biden’s envoys met with Republicans last night to continue negotiations, the president said on Wednesday. The Democrat said he won’t accept a deal that would affect health benefits.
Democrats and Republicans do not agree with this increase in the US debt issuance capacity, although it is essential for the country to meet its payments to creditors and suppliers, salaries of public servants and pensions.
Raising this limit is usually a routine procedure in the country, which has used this system dependent on Congress for decades. This time, however, as is happening more and more often, the issue is the subject of a political dispute.
In January of this year, the United States exceeded the maximum limit for issuing public debt, which is 31.4 trillion dollars (154.8 trillion reais, at current exchange rates). Since then, they have applied extraordinary measures to temporarily maintain their obligations.
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