World News

US debt ceiling: Biden and Republicans hopeful of a deal

President Joe Biden and Republican leaders have expressed cautious optimism that a deal to raise the US debt ceiling is within reach, following emergency talks at the White House.

But House of Representatives Speaker Kevin McCarthy told reporters the two sides are still far apart.

The standoff has forced Mr Biden to cut short a foreign trip.

Without a deal, the US could enter a calamitous default on its $31.4tr (£25tr) debt as soon as 1 June.

A failure by the US government to meet its debt obligations could trigger global financial chaos.

The Democratic president said Tuesday’s hour-long Oval Office meeting was “good, productive”, sounding upbeat about the prospects of an agreement.

Mr McCarthy said afterwards he believed a deal was possible by the end of this week.

Asked about the risk of the US falling off a fiscal cliff, the California congressman told : “The great thing about that question is we’ve already taken default off the table.”

He also told reporters a Biden-appointed representative would negotiate directly with his staff, which he said was a sign that “the structure of how we negotiate has improved”.

A number of senior Democrats were at the talks, including Vice-President Kamala Harris, Senate Majority Leader Chuck Schumer and House Minority Leader Hakeem Jeffries.

In exchange for support for raising the debt ceiling, Republican leaders are demanding budget cuts. They also want tougher work requirements on government aid recipients.

Citing sources familiar with the talks, news agency reports that this idea was “resoundingly” rejected by House Democrats at another meeting earlier on Tuesday.

Mr Biden has repeatedly said that a potential debt default and budgetary issues should be separate.