WASHINGTON—Joe Biden and opposition Republican leaders on Tuesday offered hope of a deal that could avoid a catastrophic US debt default, although the president was forced to shorten an upcoming Asia-Pacific tour for further crisis talks.
After the latest negotiations ended without a breakthrough, Republican House speaker Kevin McCarthy told reporters there was still “a lot of work to do” to break the high-stakes standoff with Democrat Biden over the borrowing limit.
But while stark differences remained, the White House said Biden was “optimistic that there is a path to a responsible, bipartisan budget agreement if both sides negotiate in good faith.”
And McCarthy likewise indicated he ultimately expected a deal, even if so far “nothing has been resolved.”
“America is the number one economy in the world. And when we get done with these negotiations, America’s economy is going to be stronger,” he said.
The US president—who flies to Japan on Wednesday for a G7 summit —scrapped subsequent stops in Papua New Guinea and Australia, instead returning to Washington on Sunday.
In Sydney, Biden was meant to meet the leaders of Japan, India and Australia as part of a “Quad” grouping widely seen as a counter to China.
Australian Prime Minister Anthony Albanese said Quad talks would instead take place in Japan.
The Treasury has warned of grim consequences if the country runs out of cash to pay its bills, which would leave it unable to pay federal workers and trigger a likely surge in interest rates with knock-on effects for businesses, mortgages—and global markets.
The United States could begin defaulting on its debts “potentially as early as June 1,” Treasury Secretary Janet Yellen said Monday, while the nonpartisan Congressional Budget Office has forecast June 15.