Kevin McCarthy accuses the White House of blocking the debt ceiling deal

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Republican House Speaker Kevin McCarthy accused US President Joe Biden of not wanting an agreement on the debt ceiling, as a White House meeting involving the two leaders was postponed until next week.

Speaking to reporters at the US Capitol late Thursday, McCarthy said Biden and Chuck Schumer, the Senate Democratic leader, have “no plan, no proposed savings and no guide” on how to avert a looming financial crisis.

“Apparently, President Biden doesn’t want a deal, he wants a default,” he added.

McCarthy’s belligerent comments came shortly after the White House confirmed that Democratic and Republican staffers would continue to work on the debt ceiling, but that “all principles” — Biden, McCarthy, Schumer, Republican Senate Leader Mitch McConnell and Democratic House Leader Hakeem Jeffries — “have now agreed.” “Let’s meet early next week”, instead of on Friday, as planned.

One person familiar with the meetings described the change in schedule as a “positive development” and insisted that talks on raising the debt ceiling were “progressive”.

But McCarthy was more pessimistic. He said he thought it would be “productive for the staff to get together again,” but added, “I haven’t seen from … the White House that they want a deal.”

The spokesman told reporters that all parties in the negotiations decided to postpone the meeting, and indicated that a key player, whose name he did not mention, would not be able to attend on Friday due to the funeral.

“I don’t think there’s enough progression for the leaders to get back together,” he said.

McCarthy’s comments emphasized the apparent lack of common ground between the two parties as the deadline for avoiding default approached. Democrats have called for a “clean” bill to raise the borrowing limit without preconditions. Republicans insist that any raise to the debt ceiling must be accompanied by sharp spending cuts.

Earlier on Thursday, JPMorgan CEO Jamie Dimon warned that uncertainty about the debt ceiling could spark “panic” in the markets.

Dimon was responding in part to former President Donald Trump, who pleaded with Republicans in a televised town hall Wednesday night to allow the United States to default unless Democrats give in to demands for “massive” spending cuts.

The debt ceiling was another thing [Trump] Dimon said, after the former president and frontrunner for the Republican nomination to the White House in 2024 brushed aside concerns about the economic fallout from an unprecedented default.

“It’s more psychological than anything else,” Trump said Wednesday night. “And it could be really bad, maybe nothing, maybe it was a bad week, or a bad day, who knows?”

The head of America’s largest bank told Bloomberg TV on Thursday that a default would be “catastrophic,” and warned that as the government approaches a fiscal cliff, it will “panic.”

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US Treasury Secretary Janet Yellen has warned the government of the risk of running out of money as soon as next month if Congress does not raise the debt ceiling. Before the Group of Seven finance ministers meet in Japan on Thursday, she said: “The idea of ​​defaulting on our debt is something that would severely undermine the United States and the global economy, and I think everyone should consider it unthinkable.”

Separately, the International Monetary Fund warned on Thursday of “very serious repercussions” in the event of a default when the global economy is in a “very difficult” situation, mired in low growth and high inflation.

“We strongly encourage the parties in the United States to come together to reach consensus to address this matter urgently,” Julie Kozak, director of communications at the multilateral bank, told reporters.

Dimon said JPMorgan had assembled a “war room” to meet once a week to assess the risk of a potential default. He added that the group is likely to meet more frequently as the so-called X-date approaches.

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