Washington, 20 May 2023 (GNP): Less than two weeks before a potentially terrible default, House Speaker Kevin McCarthy announced on Friday that Republicans have suspended crucial US debt crisis talks due to a lack of movement from Democrats.
The purpose of the talks between President Joe Biden’s staff and Republicans was to reach an agreement to raise the US borrowing limit, avoiding the greatest economy in the world from defaulting on its debt repayments.
“We’ve got to pause,” stated McCarthy during a press conference in Congress, emphasizing the need to control spending in the coming year.
The federal government is bringing in more money than ever. Yet our national debt has skyrocketed under President Biden.
Washington doesn't have a revenue problem—it has a spending problem. pic.twitter.com/bjlcNZYsHJ
— Kevin McCarthy (@SpeakerMcCarthy) May 19, 2023
Investors are eagerly following the US debt crisis talks in case there is a default, which may cause market turmoil on a worldwide scale.
Republicans continue to insist that Biden accept spending cutbacks in exchange for their backing to extend the debt ceiling, despite Democrats repeatedly calling for a “clean” rise in the borrowing limit without restrictions.
Democrats view the talks as an opportunity to discuss the upcoming budget before June 1, when the Treasury projects that the United States may begin defaulting on its debts, leading to severe economic repercussions.
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On Friday, the White House acknowledged considerable difficulties that still exist in the budget negotiations between both sides.
A White House official said, “There are real differences between the parties on budget issues, and talks will be difficult,” adding that the President’s staff is hard working toward a sensible, bipartisan solution that can pass both the House and the Senate.
Unexpectedly, the negotiations came to an abrupt halt the day after McCarthy voiced confidence that a measure would be on the table the following week.
However, for that timeframe to be realized, an in-principle agreement would need to be in place by Sunday or Monday.
According to reports, the biggest issue is the right-wing Freedom Caucus of House Republicans, which makes up around one-fifth of the membership and wants to roll back federal spending to 2022.
