Debt-straightening talks between the White House and House Republicans have been suspended and resumed multiple times, with President Joe Biden and world leaders heading into the weekend facing a potentially devastating federal crisis. Negotiations were halted suddenly on Friday when House Speaker Kevin McCarthy said it was time to “pause” talks. The talks are aimed at reaching a deal before a June 1 deadline when the US government needs to raise its current borrowing limit of $31 trillion in order to pay its citizens’ bills.
Republicans have demanded drastic spending cuts, which Democrats have opposed, and negotiations have revolved around the budget for 2024, with Democrats insisting that Republicans agree to cut spending and raise taxes on the wealthy to close the deficit. The biggest deadlock is over the proposed tax cuts by Republicans, which Democrats argue could harm Americans. While the talks were initially hopeful, experts warn that even the threat of a default could trigger a recession and that any deal needs to be supported by both Republicans and Democrats to become law.
President Biden attended the world summit in Japan on Saturday, telling world leaders that the US would not default. He expressed hope in closing the gap between the parties and avoiding a default, but McCarthy’s negotiators expressed uncertainty about the next steps. The talks are unlikely to take place on Saturday, with negotiators taking a break before deciding what to do next.
While there is hope for a narrower budget cap over several years rather than the 10-year cap that Republicans had originally hoped for, policy changes remain controversial. Democrats have expressed concern that the proposed cuts will disproportionately affect domestic programs on which Americans rely. McCarthy faces pressure from the far right to strike a strong deal for Republicans, but many Republicans in the house may reject any deal with the White House.