The White House and House Republicans hurried on Friday to finalise a deal on government spending that would avert an unprecedented default on US debt and remove a huge cloud of uncertainty hanging over the country’s economy.
Negotiators for US president Joe Biden and Republican House Speaker Kevin McCarthy were on Friday meeting virtually and speaking by phone to settle the remaining sticking points in the potential agreement.
People close to both sides have said they have been moving closer to a deal that would increase the US’s borrowing limit for two years, until after the 2024 general election, while setting caps that would curb spending growth over the same time period.
But there was still no certainty that a compromise could be struck. “Each time there’s more progress the issues that remain become more difficult and more challenging,” Patrick McHenry, the chair of the House Financial Services Committee and one of the House Republican’s leading negotiators, told reporters. “At some point this thing can come together — or go the other way”.
He added that it could still take “a day or two or three” for a deal to be reached.
McCarthy had struck a more upbeat tone as he arrived at the Capitol earlier in the morning.
“I’m going to work as hard as we can to try to get this done, get more progress today and finish the journey. I’m a total optimist,” the speaker said. “It’s really coming down to one thing: this has been about spending. Democrats have never wanted to stop the amount of spending.”
In a CNN interview earlier, Wally Adeyemo, the deputy US Treasury secretary, suggested a deal was at hand: “What I can say is that we’re making progress and our goal is to make sure that we get a deal because default is unacceptable.”
He added: “The president has said it, and the Speaker has said it. And we have to get something done before early June when the secretary has said that it’s highly likely that we will no longer have the resources to pay our bills.”
The urgency to strike a deal had been mounting after Treasury secretary Janet Yellen warned that a potential default could happen as early as June 1.
IMF managing director Kristalina Georgieva warned on Friday that if no deal was reached, the US would enter “uncharted territory” and face having to “trim down” spending.
Georgieva said breaching the deadline for reaching a deal would affect confidence in Treasury markets and risk “pulling the…
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