Washington: US President Joe Biden and Republican House Speaker Kevin McCarthy held a sit-down meeting earlier on Monday to discuss raising the country's debt ceiling, which limits how much the US federal government can borrow to pay its accounts. The two called their latest talks productive but no deal has yet been reached. "I believe we can get a deal done, "House Speaker McCarthy told reporters after the meeting. "We don't have an agreement yet," McCarthy added. "But I did feel the discussion was productive in areas that we have differences of opinion.''
"Biden and I will talk every day until we get this done," he said.
The debt ceiling is a spending limit set by Congress that determines how much money the government can borrow.
Failure to raise it beyond the current cap of roughly USD 31.4 trillion in June could result in the US defaulting on its debt. That would mean the government could not borrow any more money or pay all of its bills. It would also threaten to wreak havoc on the global economy.
"I just concluded a productive meeting with Speaker McCarthy about the need to prevent default and avoid a catastrophe for our economy. We reiterated once again that default is off the table and the only way to move forward is in good faith toward a bipartisan agreement," Biden said in a statement.
"While there are areas of disagreement, the Speaker and I, and his lead negotiators Chairman McHenry and Congressman Graves, and our staffs will continue to discuss the path forward," he added.
The president cut short his trip to Asia, returning from Japan late Sunday night so he could work toward a deal in the final days before the June 1 deadline. Biden and McCarthy spoke on the phone while the president was aboard Air Force One en route back to Washington, and negotiators designated by the president and speaker have been trying to reach an agreement on a framework.
Treasury Secretary Janet Yellen issued a warning letter to Congress on Monday maintaining that the US would likely run out of money to pay its bills as early as 1 June without a debt limit increase.
She heightened the urgency and called the possibility of a default in early June "highly likely". "If Congress fails to increase the debt limit, it would cause severe hardship to American families," her statement read.
Republicans are demanding over USD 4 trillion in budget cuts which would dissolve several of Biden's legislative priorities. Democrats have refused and instead are offering to keep spending flat.