WASHINGTON, D.C. (NBC) – President Biden and House Republicans are still locked in a standoff over the debt limit with just over two weeks until the treasury secretary says the U.S. will run out of money to pay its bills. But both sides say they’re confident they can reach a deal and avert an economic meltdown.
With the clock ticking toward potential catastrophe, there’s no deal yet between President Biden and House Speaker Kevin McCarthy (R-CA) over the debt limit. But Tuesday’s White House meeting between the president and congressional leaders may have broken new ground.
Biden said, “There was an overwhelming consensus, I think, in today’s meeting with congressional leaders that defaulting on the debt is simply not an option.”
“It is possible to get to a deal by the end of the week, McCarthy said. “It’s not that difficult to get to an agreement.”
For the first time, Democratic leaders are conceding a bipartisan compromise will be needed to break the impasse, likely combining an increase in the nation’s borrowing limit with spending cuts.
House Minority Leader Hakeem Jeffries (D-NY) said, “We all agreed that the only path forward is to reach a bipartisan agreement anchored in common ground.”
That means a so-called “clean” debt limit increase with no spending cuts attached favored by the president and Democrats is now off the table.
The White House says President Biden has appointed two top aides to lead negotiations with the House speaker’s team.
While the president will depart for the G7 summit in Japan Wednesday, as scheduled, he’ll cut his overseas trip short, skipping a planned summit in Australia and returning to Washington Sunday to deal with the crisis.
Because the global financial system relies on the dollar, economists say the damage from even a short-term default could be disastrous. The government would be unable to pay its bills, Social
Security checks, tax refunds and veterans’ benefits could all be delayed. Interest rates would spike and if the markets take a big hit—as expected—the value of your retirement account could plummet.
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