Biden declares ‘America will not default,’ says he’s confident of budget deal with GOP lawmakers
Facts
- On Wednesday, US Pres. Joe Biden and Republican lawmakers expressed optimism that a deal to raise the US debt ceiling could be reached by the end of the week, following emergency talks at the White House.[1]
- Before leaving for Japan to participate in the G7 summit, Biden told reporters he was confident that an agreement on the budget would be reached as "there's no alternative," adding that "every leader understands the consequences of failure."[2]
- Biden's reassurance comes as a select group of negotiators plan to discuss finalizing a budget spending deal to enable the debt limit to be raised, otherwise the US could begin defaulting on its obligations and trigger financial chaos as early as June 1.[3]
- If the House of Representatives and Senate fail to pass a bipartisan bill to raise the $31.4T debt ceiling, the US could run out of funds to pay the federal government's bills.[4]
- The upcoming Quad summit in Australia was canceled after Biden pulled out of it to return to Washington on Sunday to focus on debt-ceiling talks.[5]
- While the Democratic-controlled Senate wants any bill that lifts the debt ceiling to be separate from next year's budget, the Republican-led House of Representatives has called for the budget to be returned to levels of the 2022 fiscal year.[2]
Spin
Pro-establishment narrative
While this laborious process is far from over, real progress is being made in negotiations to raise the debt ceiling. The US defaulting on its debts is not an option, and both political parties are working hard to ensure that does not happen.
Establishment-critical narrative
While lawmakers may be hopeful about negotiations to raise the debt ceiling, this process has taken far too long. Faith in the US financial system is further diminishing every moment a deal is not made. Nobody should use the threat of defaulting as leverage; both Democrats and Republicans have failed the electorate by putting partisan politics ahead of the national interest.
Nerd narrative
There is a 4.9% chance that the United States will default on its sovereign debt before 2024, according to the Metaculus prediction community.
