An optimistic President Joe Biden declared Wednesday that he is confident the U.S. will avoid an unprecedented and potentially catastrophic debt default, saying talks with congressional Republicans have been productive as he prepared to leave for a global summit in Japan.
Biden’s upbeat remarks came as a select group of negotiators began meeting to try and hammer out the final contours of a budget spending agreement to unlock a path forward for raising the debt limit by June 1. That is when the Treasury Department says the U.S. could begin defaulting on its obligations and trigger financial chaos.
“I’m confident that we’ll get the agreement on the budget and America will not default,” the president said from the Roosevelt Room of the White House. He said a meeting late Tuesday with Vice President Kamala Harris, House Speaker Kevin McCarthy, R-Calif., and other congressional leaders was “productive” and that “everyone came to the meeting, I think, in good faith.”
Biden stressed that every leader — McCarthy, House Minority Leader Hakeem Jeffries, D-N.Y., Senate Majority Leader Chuck Schumer, D-N.Y., and Senate Minority Leader Mitch McConnell, R-Ky. — agreed the U.S. would not default on its obligations.
“It would be catastrophic for the American economy and the American people if we didn’t pay our bills,” Biden said. “I’m confident everyone in the room agreed … that we’re going to come together because there’s no alternative. We have to do the right thing for the country. We have to move on.”
Soon after his remarks on Wednesday, Biden was leaving for the Group of Seven summit in Hiroshima, Japan. The president said he would be in “constant contact” with White House officials while attending the summit.
Biden and McCarthy tasked a handful of representatives to try and close out a final deal, with negotiations beginning late Tuesday. Those include Steve Ricchetti, counselor to the president; legislative affairs director Louisa Terrell and Office of Management and Budget Director Shalanda Young for the administration, and Rep. Garret Graves, R-La., a close McCarthy ally, for the Republicans.
McCarthy was upbeat Wednesday on resolving the issue, but cautioned on CNBC’s “Squawk Box”: “The problem is, the timeline is very short.”
The national debt currently stands at $31.4 trillion. An increase in the debt limit would not authorize new federal spending; it would only allow for borrowing to pay for what Congress has already approved.