With the Treasury Department warning that the US government could run out of money as early as Jun 1 – triggering massive economic disruption in the world’s biggest economy and likely around the globe – the political battle in Washington has see-sawed without any clear sign of resolution.
Republicans, who control the House of Representatives, are demanding steep budget cuts as a price for allowing an extension of the government’s borrowing authority.
The White House is seeking to whittle down those demands, while arguing that the traditionally uncontroversial annual debt ceiling increase is being weaponised for political gain.
Hopes for a settlement took a blow Friday when Republicans walked out of negotiations, declaring a “pause”.
However, the talks had restarted hours later, leading Jean-Pierre to say “we are indeed optimistic”.
Biden, who has expressed a willingness to be patient and said he was not worried, leaves Japan for Washington on Sunday, cutting short a trip that had been set to take him to Papua New Guinea and Australia next week.
More borrowing is required by the US government just to meet expenditures already made, meaning failure to strike a deal to lift the debt ceiling would leave Washington unable to pay its bills, triggering an array of economic shockwaves.
“We’re making 0 demands to avoid default. You’re the only ones with a hostage,” tweeted White House spokesperson Andrew Bates late Saturday, accusing Republicans of seeking to trigger a recession.