Beautiful Virgin Islands

Tuesday, Jun 24, 2025

US debt ceiling: Biden and Republicans hopeful of a deal

US debt ceiling: Biden and Republicans hopeful of a deal

President Joe Biden and Republican leaders have expressed cautious optimism that a deal to raise the US debt ceiling is within reach, following emergency talks at the White House.

But House of Representatives Speaker Kevin McCarthy told reporters the two sides are still far apart.

The standoff has forced Mr Biden to cut short a foreign trip.

Without a deal, the US could enter a calamitous default on its $31.4tr (£25tr) debt as soon as 1 June.

A failure by the US government to meet its debt obligations could trigger global financial chaos.

The Democratic president said Tuesday's hour-long Oval Office meeting was "good, productive", sounding upbeat about the prospects of an agreement.

Mr McCarthy said afterwards he believed a deal was possible by the end of this week.

Asked about the risk of the US falling off a fiscal cliff, the California congressman told BBC News: "The great thing about that question is we've already taken default off the table."

He also told reporters a Biden-appointed representative would negotiate directly with his staff, which he said was a sign that "the structure of how we negotiate has improved".

A number of senior Democrats were at the talks, including Vice-President Kamala Harris, Senate Majority Leader Chuck Schumer and House Minority Leader Hakeem Jeffries.

In exchange for support for raising the debt ceiling, Republican leaders are demanding budget cuts. They also want tougher work requirements on government aid recipients.

Citing sources familiar with the talks, the Associated Press news agency reports that this idea was "resoundingly" rejected by House Democrats at another meeting earlier on Tuesday.

Mr Biden has repeatedly said that a potential debt default and budgetary issues should be separate.


The president is due to fly to the G7 summit in Japan on Wednesday. He was then expected to head to Papua New Guinea and Australia for further meetings.

But he will now return after the 19-21 May summit ends in Hiroshima to "ensure that Congress takes action" to avert a default, the White House said in a statement.

The so-called Quad meeting in Sydney has now been cancelled, and the leaders will attempt to meet on the sidelines of the G7, Australian Prime Minister Anthony Albanese said.

Reaching the debt ceiling would mean the US government is unable to borrow any more money.

This means the government would no longer be able to pay the salaries of federal and military employees. Social Security cheques - payments that millions of pensioners in the US rely on - would stop.

Every so often the US Congress votes to raise or suspend the ceiling so it can borrow more.

A default - which would be a first in US history - could shatter trust in America's political ability to pay its bills.

Experts have warned it could also see the US spiral into recession and trigger a rise in unemployment.

Treasury Secretary Janet Yellen said at an event on Tuesday that "a US default would generate an economic and financial catastrophe".

Meanwhile, White House National Security Council spokesman John Kirby said: "There's countries like Russia and China that would love nothing more than for us to default."

A deal to avoid this scenario has so far proven elusive. In April, Republicans proposed an agreement that would suspend the debt limit by $1.5tn or until 31 March, whichever comes first.

In exchange, they would maintain spending at key government agencies at 2022 levels for the next financial year and limit spending growth to 1% annually over the next 10 years.

They argued this would lead to $4.8tn in savings.

The proposal, however, would scupper several of Mr Biden's legislative priorities, including student loan forgiveness.

The last time the US was approaching a default, back in 2011, lawmakers struck a deal hours before the deadline.

That standoff led to a downgrade in the US credit rating, sent the stock market plummeting and increased the government's borrowing costs.

"Nobody should use default as a hostage," Senate Majority Leader Chuck Schumer said at the US Capitol on Tuesday. "The consequences would be devastating for America."

The US debt ceiling has been raised, extended or revised 78 times since 1960.

Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
“You Have 12 Hours to Flee”: Israeli Threat Campaign Targets Surviving Iranian Officials
Macron and Merz: Europe must arm itself in an unstable world
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Airlines Evaluate Flight Cancellations Amid Escalating US-Iran Tensions
Starmer Invites Innovators to Join Government Talent Scheme
UK Economy’s Strong Opening Quarter Shows Signs of Cooling
Harrods Seeks Court Order to Secure Al Fayed Estate for Victims
BA and Singapore Airlines Cancel Dubai Flights Amid Middle East Tensions
Trump Faces Backlash from MAGA Base Over Iran Strikes
Meta Bets $14 B on Alexandr Wang to Drive AI Ambitions
WATCH: Israeli forces show the aftermath of a massive airstrike at Iran's Isfahan nuclear site
FedEx Founder Fred Smith, ‘Heart and Soul’ of the Company, Dies at 80
Chinese Factories Shift Away from U.S. Amid Trump‑Era Tariffs
Pimco Seizes Opportunity in Japan’s Dislocated Bond Market
Labubu Doll Drives Pop Mart to Status as China’s Most Valuable Toy Maker
Global Coal Demand Defies Paris Accord Goals
We have new information and breaking details to share about what is shaping up to be a historic air campaign tonight
Six Massive Bombs Dropped on Fordow; Trump: 'A Historic Moment for the U.S., Israel, and the World'
Fordow: Deeply Buried Iranian Enrichment Site in U.S.–Israel Crosshairs
United States Conducts Precision Strikes on Iran’s Nuclear Sites
US strikes Iran nuclear sites, Trump says
Pakistan to nominate Trump for Nobel Peace Prize.
BBC Demands Perplexity AI Immediately Stop Using Its Content
Telegram Founder: I Will Leave My Fortune to Over 100 of My Children
Political Turmoil Resurfaces in Belgium Amid Economic Concerns
Fed policymakers divided on timing of interest rate cuts
Trump signals imminent agreement with Harvard University
Inheritance tax referendum alarms Swiss billionaire community
Japan cancels bilateral security meeting amid US defence demands
AI skeptic Emily Bender warns that ‘the emperor has no clothes’
Israel Confirms Assassination of Quds Force Commander in Tehran
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
Iranian Military Officers Reportedly Seek Contact with Reza Pahlavi, Signal Intent to Defect
FBI and Senate Investigate Allegations of Chinese Plot to Influence the 2020 Election in Biden’s Favor Using Fake U.S. Driver’s Licenses
Vietnam Emerges as Luxury Yacht Destination for Ultra‑Rich
Plans to Sell Dutch Embassy in Bangkok Face Local Opposition
China's Iranian Oil Imports Face Disruption Amid Escalating Middle East Tensions
Trump's $5 Million 'Trump Card' Visa Program Draws Nearly 70,000 Applicants
DGCA Finds No Major Safety Concerns in Air India's Boeing 787 Fleet
Airlines Reroute Flights Amid Expanding Middle East Conflict Zones
Elon Musk's xAI Seeks $9.3 Billion in Funding Amid AI Expansion
Trump Demands Iran's Unconditional Surrender Amid Escalating Conflict
Israeli Airstrike Targets Iranian State TV in Central Tehran
President Trump is leaving the G7 summit early and has ordered the National Security Council to the Situation Room
Taiwan Imposes Export Ban on Chips to Huawei and SMIC
Israel has just announced plans to strike Tehran again, and in response, Trump has urged people to evacuate
Netanyahu Signals Potential Regime Change in Iran
Juncker Criticizes EU Inaction on Trump Tariffs
EU Proposes Ban on New Russian Gas Contracts
×