No deal in opening talks on US debt limit

During early talks between US President Joe Biden and Speaker of the House Kevin McCarthy on raising the debt limit, there was no agreement. It was a “very good conversation”, McCarthy said after the meeting, although they had different perspectives. They agreed to meet again. McCarthy said he believes he and Biden can eventually reach an agreement.

In the conversation, Biden made it clear that raising the debt limit was neither negotiable nor subject to conditions, the White House said in a statement. The debt limit must be raised if the US government wants to remain solvent.

The previous debt ceiling of around 31.4 trillion US dollars (currently just under 29 trillion euros) was already reached on 19 January. Finance Minister Janet Yellen said in mid-January that the government could remain solvent until early June by reallocating funds.

The House of Representatives, in which McCarthy’s Republicans have held a narrow majority since early January, is expected to approve the increase. In exchange for an increase in the debt limit, Republicans, particularly on the far right, are demanding drastic cuts in government spending. Over the weekend, McCarthy said there would be no defaults.

In the past, Republicans and Democrats have always agreed to raise the limit — though often only after a bitter struggle. A default by the world’s largest economy could have dramatic consequences for the global economy.