Biden has stated he wants a “clean” hike of the debt ceiling, but Republicans are insisting any extension of the country’s borrowing authority, currently capped at US$31.4 trillion, come with substantial curbs on spending.
“It’s time to bring spending levels back to pre-COVID, and then we can talk about raising the debt ceiling,” Byron Donalds, a Republican representative from Florida, told FOX News on Sunday.
“If Joe Biden brings nothing to the table, if all he does is sit there with his hands in his pockets… then he’s the one leading our nation into default.”
Former president Donald Trump has encouraged Republican lawmakers to hold out for a default if Biden doesn’t agree to “massive cuts”.
The looming possibility of a default has also threatened Biden’s upcoming trip to Asia for a G7 leaders meeting, among other events in the region.
Asked by reporters Sunday if he still planned to leave this week, Biden said: “That’s my plan as it stands now.”
Adeyemo acknowledged “constructive” negotiations were ongoing at the staff level, while pushing back on assertions that Biden does not want to address ballooning US debt.
“The president’s laid out a plan that includes US$3 trillion in debt relief over 10 years,” Adeyemo said, referring to Biden’s budget request unveiled in March, which featured tax increases on the wealthy and businesses.
Congressional leaders should address ways to hammer out a deal on fiscal policy, “but as we have that conversation, there is no reason we shouldn’t raise the debt limit and prevent default in this country, a default that could lead to a massive recession that would cost us millions of jobs,” he said.
Lael Brainard, director of the White House’s National Economic Council, maintained that a deal would be reached.
“Our expectation is that Congress will do what is necessary” to avoid a default, Brainard, a former Federal Reserve vice chair, told CBS Sunday show “Face the Nation”.
Biden addressed the issue on Saturday in Delaware, where he talked briefly to reporters.
“They’re moving along,” he said of the talks. But while there was “real discussion”, he added the two sides were “not there yet”.