Leaders Confident Debt Deal Can Be Done By End Of Week

President Biden met with House Speaker McCarthy on Tuesday to come to an agreement on lifting the debt ceiling. Biden left the meeting optimistic that a deal can be done in days, whereas McCarthy was more cautious and said that there are still big differences between the two sides. Republicans want to see significant spending cuts from the administration and increased work for federal aid before they agree to increase the borrowing limit.

• Biden said following the meeting that “there was an overwhelming consensus, I think, among the congressional leaders that defaulting on the debt is simply not an option,” but “there’s still work to do”. He will not accept conditions though that could take away people’s healthcare.
• McCarthy has also said that there is a lot of work to do but that a deal is possible by the end of the week. Other Congressional leaders sounded more positive too following the meeting, according to Bloomberg.
• The President will no longer visit Australia and Papua New Guinea due to the ongoing talks, but will still attend the G7 meeting in Japan. He will be in regular contact with the negotiators and will meet with them again after he returns from Japan on Sunday.
• Markets have been nervous that a deal won’t be reached in time which would trigger a default as soon as June, which would destabilise markets and likely push the US economy into recession. The S&P fell 0.6% on Tuesday and Treasury yields were higher.