President Biden and top congressional leaders have agreed to delay the next round of debt limit talks, scheduled for Friday, until next week, a White House spokesman said Thursday.
The decision to postpone the high-level meeting was described as a “positive development” by a person familiar with the decision, who said it would give team members more time to work on a deal before Biden and congressional leaders agree. meet again.
The delay occurs as the United States approaches debt default. Janet L. Yellen, the Treasury secretary, warned that the government could run out of money to pay all its bills as early as June 1.
The struggle to find a solution comes less than a week before Biden plans to travel to Japan for a meeting of Group of 7 leaders. Yellen, who has been employing accounting maneuvers to delay a default, is in Japan this week for a meeting of G7 finance ministers and warned on Thursday of dire economic consequences if the United States does not pay its bills on time.
“A default would threaten the gains we’ve worked so hard to make over the last few years in our pandemic recovery,” Yellen said. “And that would trigger a global recession that would set us back much further.”
She added: “It would also risk undermining US global economic leadership and raise questions about our ability to defend our national security interests.”
Mr. Biden and Republican leaders in Congress, long at loggerheads, appear to be working on a deal to raise the country’s debt limit. That includes an effort to cut federal discretionary spending next year and possibly even further into the future.
Administration officials have so far rejected any deal with McCarthy that reverses Biden’s signature legislative achievements, particularly on climate change. They are urging Republicans to scrap key provisions of a bill to raise the debt limit passed by the House last month, including repealing most of Biden’s clean energy tax breaks and a raft of new incentives for development. of fossil fuels.
On the narrower issue of discretionary spending, administration officials are pushing for significantly smaller cuts than House Republicans approved last month. They want short-term spending caps rather than the decade-long caps on the Republican bill. And they want to base those caps on a higher spending level than Republicans — the amount of this year’s government funding bill, which Biden signed into law in December. Republicans capped spending growth starting in fiscal 2022.
Administration officials are also open to striking a deal with Republicans to accelerate the licensing of a wide range of energy projects, including wind, oil, gas and solar — a top priority for Senator Joe Manchin III of West Virginia. And Biden said Tuesday that he would consider recovering some unspent stimulus funds included in a bill he signed into law in 2021, which is a Republican priority.
Officials are hoping such a deal could gain approval — and pressure on Republicans — from business groups. That combination of issues formed the basis of a potential debt limit deal that US Chamber of Commerce officials unveiled this month.