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Kevin McCarthy, the Republican House Speaker, and US President Joe Biden announced that recent talks on the debt ceiling were productive. However, they were yet to reach a fair deal. The House Speaker believes that they will soon finalize the deal. Biden thinks a default is off the table, acknowledging disagreement. The debt ceiling generally refers to the spending limit that Congress sets to determine the amount the government can borrow.

Reports indicate that if Congress does not raise the debt ceiling from the current cap of about £25.2tn by June, the United States might default on its debt. In other words, the US government might not access loans to pay its bills. The situation will, unfortunately, wreak havoc on the worldwide economy by hurting mortgage rates and prices in other countries. Republicans are pushing for over $4tn spending cuts before raising the ceiling.

On the other hand, the Democrats have rejected the proposal. Other factors that play a role in this issue are work requirements among benefits holders and the unspent Covid-19 relief. Meanwhile, Mrs. Janet Yellen, the Treasury Secretary, has presumed that the US might default on its debt by as early as 1st June if Republicans do not raise the ceiling. Biden and McCarthy’s talk at the white house appear optimistic following days of divisive partisan discourse.

Nonetheless, it remains unclear when the two parties will strike a deal. McCarthy clarified that they had not agreed yet, but the discussion was successful in areas with different opinions. The speaker also said they would constantly converse with the president for a quick agreement. He had emphasized that it was critical to decide this week to allow Congress to implement it before 1st June.

McCarthy said it would take about 72 hours to vote on, read and write the agreement. In any case, Treasury Secretary Mrs. Yellen warned Congress again that the economy might default on its bills by 1st June. After calling out the likelihood of a default early next month, she heightened the urgency to raise the debt ceiling.

She concluded that if Congress delays raising the debt ceiling, it will result in severe hardship for US families. The House Speaker and the President are under pressure from their respective parties to decide. Above all, the Republican is a one-seat minority, giving the Democratic a narrow control over the house.