President Joe Biden and top members of Congress will meet to address the three-month-long deadlock over the US debt ceiling of $31.4 trillion.
Biden is urging lawmakers to increase the federal government’s borrowing limit without conditions, but Republican House Speaker Kevin McCarthy has insisted on spending cuts to tackle the growing budget deficit.
The talks, which will include Senate Majority Leader Chuck Schumer and top Senate Republican Mitch McConnell, as well as Top House Democrat Hakeem Jeffries, could ease the concerns of investors who caused the government to pay its highest interest rate for a one-month debt issue last week.
However, analysts do not expect an immediate resolution to prevent a historic default, plunging the US economy into a deep recession and soaring unemployment.
The last time the nation faced a debt crisis was in 2011, and it resulted in a significant stock selloff and the United States’ credit rating being downgraded.
To avert a similar fate, outside observers, including those who have taken part in previous fiscal negotiations and business lobby groups, suggest extending the debt ceiling beyond the November 2024 presidential elections while freezing spending.
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