US debt ceiling: No agreement from Biden and McCarthy talks

Republican lawmaker Kevin McCarthy said on Monday that no agreement was reached in talks over raising the US federal government's debt ceiling .

McCarthy, who is the speaker of the House of Representatives, made the comments following a meeting with President Joe Biden.

McCarthy said that the discussion had been "productive" despite the lack of a deal.

"I felt we had a productive discussion. We don't have an agreement yet, but I did feel the discussion was productive in areas (where) we have differences of opinion," he stressed.

He said that negotiators were "going to get together, work through the night" in a bid to reach a deal. "I believe we can still get there," he said.

Hours before the meeting, the Republican lawmaker said that he believed negotiations were "on the right path."

"We reiterated once again that default is off the table and the only way to move forward is in good faith toward a bipartisan agreement," Biden said following his discussion with McCarthy.

As talks began, Biden had said he was "optimistic we're going to make some progress." He added afterwards that a default would be "a catastrophe." 

What is the deadline on a debt ceiling deal?

The federal government currently has a borrowing limit of $31.4 trillion (€29 trillion).

Biden has warned that any default could have "catastrophic" consequences.

McCarthy and Biden have 10 days to reach a deal to increase the debt ceiling.

Any agreement to raise the ceiling must pass both chambers of Congress. The Republicans control the House 222-213, while Biden's Democrats have a slim 51-49 majority in the Senate.

It will take several days for Congress to deliberate and pass any legislation born out of a possible deal between Biden and McCarthy.

"We can get a deal tonight. We could deal tomorrow but you got to get something done this week to be able to pass it and move it to the Senate," McCarthy said.

Treasury Secretary Janet Yellen warned that it is "highly likely" that the government department will no longer be able to pay all obligations by early June if the debt ceiling is not raised.

What Republicans want in exchange for a deal

A White House official said on Monday that Republican negotiators had proposed cuts to food aid programs.

Republicans have also proposed a reduction in COVID-19 aid approved by Congress and work requirements for some programs for people with low incomes. Lawmakers in the party aim to bring spending down to 2022 levels.

Biden said that the last offer made by Republicans was "unacceptable." He said that he would not support oil subsidies and "wealthy tax cheats" while reducing food aid and healthcare spending.

"We have to spend less next year than we spent this year," McCarthy said on Monday.

"The time of spending, just spending more money in America and government is wrong," he said following talks with Biden.

sdi/rt (Reuters, AFP)