Talks continue but debt limit debate remains divided

WASHINGTON — United States President Joe Biden and top lawmakers agreed on Tuesday to further talks aimed at breaking a deadlock over raising the $31.4 trillion US debt limit, with just three weeks before the country may be forced into an unprecedented default.

After about an hour of talks in the Oval Office, Biden, a Democrat, and House of Representatives Speaker Kevin McCarthy, a Republican, committed their aides to daily discussions about areas of possible agreement as a default looms as soon as June 1.

Biden, McCarthy and the three other top congressional leaders were set to meet again on Friday.

Biden called the talks "productive" and appeared to offer Republicans some possible compromises, including taking a "hard look" for the first time at clawing back unspent coronavirus relief funds to reduce government spending.

But he repeated that Republicans must take the threat of default off the table. He also did not rule out eventually invoking the 14th Amendment to the US Constitution, an untested approach that would seek to declare the debt limit unconstitutional. Doing so would require litigation, he said, but is an option he may study in the future.

"There's a lot of politics and posturing, and that's going to continue for a while," Biden said.

McCarthy emphasized a lack of progress after the meeting. "I didn't see any new movement," he said, complaining that Biden did not agree to talks until time was running out. "That's not a way to govern."

Economists warn that a lengthy default could send the economy into a deep recession with soaring unemployment while destabilizing a global financial system built on US bonds. Investors are bracing for impact.

Biden is calling on lawmakers to raise the federal government's self-imposed borrowing limit without conditions. However, McCarthy said his chamber will not approve any deal that does not dramatically cut spending to address a growing budget deficit and signaled that he does not see a short-term fix.

Past debt ceiling fights have typically ended with a hastily arranged agreement in the final hours of negotiations, thus avoiding a default. In 2011, the scramble prompted a historic downgrade of the country's top-notch credit rating. Veterans of that battle warn the current situation is riskier because political divides have widened.

Neil Bradley, a top policy official at the US Chamber of Commerce, said it was positive that the two sides would continue meeting.

"But we cannot stress enough that time is short, with each passing day increasing the risk for a misstep resulting in a default."

Agencies Via Xinhua