If Congress does not raise the US debt ceiling by then, the country could default on its loans, in a potentially catastrophic event for global financial markets.
A meeting at the White House with Republican negotiators on Friday ended without progress, amid a major disagreement between the two sides, which led to a stall in negotiations, which alarmed financial markets as the deadline for avoiding default approached.
But Republican Kevin McCarthy, Speaker of the US House of Representatives, said that Republican members of the House have resumed negotiations with the Democratic administration of President Joe Biden on raising the federal government’s borrowing limit of $ 31.4 trillion.
The White House confirmed the resumption of negotiations, but said that there were still serious differences with the Republican negotiators in the debt ceiling talks, indicating that the talks will remain difficult as the two sides seek to reach an agreement.
On Saturday, US President Joe Biden expressed 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.
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.
The Democrats have accused the Republicans of using excessive tactics to advance their political agenda before the time when the United States will start defaulting on its debt because the government is running out of money.
White House spokeswoman Karen Jean-Pierre told reporters in Japan, where Biden is attending a meeting of G7 leaders, that negotiators will continue to work toward a reasonable solution to avoid default.
“We remain optimistic,” she added.
The two sides have little time to reach an agreement to raise the federal government’s borrowing limit or risk a catastrophic default. And the Treasury warned that the government may not be able to pay all its obligations by June 1.
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