As the clock ticks down a possible default of USADemocratic President Joe Biden’s negotiators and Republicans are trying to stop him Tuesday with a budget deal.
Negotiators from the White House and the Republican Speaker of the House of Representatives, Kevin McCarthy, they plan to continue talks after Monday’s meeting between their respective leaders.
Biden and McCarthy called their meeting at the White House “productive” and while it did not produce an agreement, it did at least allow them to set their respective boundaries.
In nine days, the United States runs the risk of finding itself in the unprecedented situation of not being able to honor its debts; a dangerous situation for the first world power.
Panic
If Congress does not raise the government’s borrowing capacity by then, Biden could be unable to pay officials, pay welfare benefits and repay some creditors.
Such an insolvency of the United States would have effects on the world economy. It would generate panic and recession that would spread to the world economy, according to analysts.
To increase borrowing power – currently over $31 trillion – Republicans are demanding Biden cut spending.
Democrats are willing to moderate spending, but disagree with Republicans on how to do it.
The White House would like to tax the richest and the largest companies with higher taxes, without touching social benefits or the president’s large investment projects. In short, increase the revenue of the federal government.
Republicans, on the other hand, prefer to cut public spending.
2024
The commitment, according to the US press, could be found in some specific budget items, in a reallocation of funds destined to combat the covid and in a freeze on certain expenses, the duration of which is the subject of bitter debate.
Time is short, especially since it’s not just about Biden and McCarthy coming to terms with each other. As Biden said, both will have to “sell” the agreement to their respective parties, so that they approve it in both houses of Congress.
Democrats control the Senate by a narrow margin and Republicans hold a majority in the House of Representatives.
Democratic senators considered to be from the progressive wing and Republican legislators aligned with Donald Trump have already demanded maximum firmness from their respective leaders.
A US default could change the tone of the campaign towards next year’s presidential elections.
Biden, who at 80 is running for re-election, is fighting to win votes with promises of prosperity and social justice. A recession would sink his already weak approval rating.
His predecessor Trump, favorite in the Republican primaries, asks his people not to “bend” to the White House on the debt issue.
Source: AFP
