President Joe Biden declared Thursday that a US debt default will be avoided, as the clock ticked down on the race to find agreement between the White House and Republican negotiators.
“There will be no default,” he said. Biden also said that his negotiations with Republican Speaker Kevin McCarthy, who leads the narrow majority in the House of Representatives, had been “productive.”
The upbeat assessment came just a week before the estimated “X date” when the government will run out of money if Republicans controlling the House of Representatives do not agree to authorize more borrowing.
“The team has had productive discussions,” White House Press Secretary Karine Jean-Pierre said. “Clearly that means there continues to be a path forward.”
Jean-Pierre said the latest round of talks was held virtually earlier Thursday. She gave no details of what the two sides were crafting in an attempt to get bipartisan support in the nearly evenly split Congress.
“Both sides will have to understand that neither side is going to get everything that they want,” she said.
Republicans are pushing for huge spending cuts as a condition for extending the US debt ceiling.
Biden has rejected that and accused the Republicans of taking the world’s biggest economy hostage by pushing it toward the brink of a debt default.
“Default is not an option,” Jean-Pierre said, warning that the shock from a debt default could lead to the loss of eight million jobs and “devastate retirement accounts.”
Pressed on whether Biden is preparing an emergency plan B, if the talks fail to reach a compromise, she said “the only option right now is for… Congress to do their jobs.”
Despite the note of optimism, Biden reflected on the deep divide between the two sides over how to reduce the country’s giant $31 trillion deficit.
Republicans are taking aim at social spending programs while Biden wants to raise taxes on the most wealthy Americans and corporations.
Biden said he and McCarthy have a “very different view on who should bear the burden of additional efforts to get our fiscal house in order. I don’t believe the whole burden should fall on the backs of middle class and working class Americans. My House Republican friends disagree.”
