The US will be unable to pay its obligations by June 5 unless Congress lifts the debt ceiling , the treasury secretary, Janet Yellen, said on Friday as Democratic and Republican negotiators tried to come to an agreement.
If we do not increase the debt payment, it could lead to a default that devastates the economy and international markets. The announcement by Yellen allows negotiators a bit more time to reach a deal. One of the Republican negotiators, Patrick McHenry, claimed they might make the deadline of June 5.
“We’re not done, but we’re within the window of being able to perform this and we have to come to some really tough terms,” he told reporters. In addition ,Biden told reporters he thought the negotiators were very close to a deal. “Things are looking good. I’m very optimistic,” the president said.
Lawmakers had reported being close to concluding talks as they sought to avoid a disastrous and unprecedented default. Wall Street and European shares rose as the White House and congressional Republicans worked on the final touches of a package to present to Congress.
Internal Revenue Service (IRS)
Negotiators appeared to be nearing a deal to lift the limit for two years and cap spending, with agreement on funding for the Internal Revenue Service (IRS) and the military. But a White House official told the same outlet talks could easily slip into the weekend. Lawmakers received a call after they left Washington for the Memorial Day holiday.
Any agreement would have to win approval in the Republican-controlled House and the Democratic-led Senate before Biden could sign it into law – a process that could take more than a week.
“We have made progress,” the lead Republican negotiator, Garret Graves, told reporters. “I stated two days ago that we made some progress on certain key issues, In addition he said “but let me clarify that we still face major issues where we have not bridged the gap, with work requirements being the most significant among them.”
The Republican House speaker, Kevin McCarthy, told reporters at the Capitol: “We know it’s crunch time. We’re not just trying to get an agreement, we’re trying to get something that’s worthy of the American people, that changes the trajectory.”
Democrats indicated Joe Biden was willing to consider spending cuts, including to planned extra funding for the IRS, a target of rightwing attacks, the Washington Post reported. Citing an anonymous official, Reuters said the deal would raise the ceiling for two years “while capping spending on everything but military and veterans”.