Republican leader Kevin McCarthy and US President Joe Biden described their most recent debt ceiling discussions as productive, but no agreement has yet been reached.
Speaker of the House McCarthy told reporters, “I think we can reach an agreement.
Despite admitting there were differences, Mr. Biden stated that a default was “off the table”.
What determines how much money the government can borrow is called the debt ceiling, which is a spending cap set by Congress.
By June, if it hasn’t been increased above the current cap of roughly $31.4tn (£25.2tn), the US might default on its debt.
If so, the government would be unable to take out any additional loans or cover all of its obligations. The global economy would also be in danger of suffering, which would have an impact on international prices and mortgage rates.
Republicans under the leadership of Mr. McCarthy have been requesting $4 trillion in spending reductions in exchange for raising the debt ceiling. Democrats offered to maintain flat spending but were rejected.
Strengthening work requirements for those receiving benefits and what to do with unspent funds are other contentious issues. Covid-19 emergency aid.
According to Treasury Secretary Janet Yellen, if a deal cannot be reached, the US may default on its debt as early as June 1.
After weeks of bitter partisan debate, the White House discussions seemed to have a more upbeat atmosphere. But it’s not clear how quickly the two parties can come to an agreement.
“We don’t have an agreement yet,” Mr. McCarthy stated. But I did think that the conversation was fruitful in areas where we disagreed.
He promised to speak with Biden every day until the matter was resolved.
The House speaker had earlier emphasized the need for a deal this week in order to give Congress enough time to meet the deadline of June 1.
He calculated that it would take about 72 hours to write, read, and vote on the agreement.
Treasury Secretary Janet Yellen issued a warning letter to Congress on Monday maintaining that the US would likely run out of money to pay its bills as early as 1 June without a debt limit increase.
