US debt ceiling: Joe Biden and Kevin McCarthy seek to break deadlock

President Joe Biden and top Republican Kevin McCarthy held a phone conversation, marking a change in the stalemate over the US debt ceiling. After returning from the G7 summit in Japan, Biden expressed optimism about the call, stating that it went well and that they planned to continue discussions on Monday.

Disagreements persist between the two sides, particularly regarding the Republicans’ insistence on budget cuts as a precondition for raising the debt ceiling. Failure to reach an agreement by June could result in a US default, preventing the government from borrowing more money or meeting its financial obligations. The Treasury Department has cautioned that default could begin on June 1, leading to financial market chaos and increased interest rates.

As he left Japan on Sunday, Biden told reporters that proposals by Republicans – who control the House of Representatives – were “simply, quite frankly, unacceptable”.

He added: “It’s time for Republicans to accept that there is no bipartisan deal to be made solely, solely on their partisan terms. They have to move as well.”

But the president did say he would be willing to cut spending to reach a deal.

Biden has since cancelled foreign visits that were due to follow the G7 summit, in order to deal with the deadlock over federal debt.

McCarthy described the call as productive, expressing hope that Biden would understand their perspective.