- By Sam Cabral
- BBC News, Washington
image sources, Getty Images
Congressional Republicans have halted talks to raise the US debt ceiling, casting doubt on talks to avoid a default.
Garrett Graves, the Republican chief negotiator, left a closed-door meeting with White House officials Friday morning.
Graves told reporters as he left that the Joe Biden administration was making “unreasonable” demands.
The White House confirmed that talks are on hold for the time being.
Without an agreement, the United States risks losing the ability to borrow more money, leading to default.
The Treasury Department has warned that unless the debt ceiling is raised, the government will not be able to pay all its bills after June 1.
Failure to raise the debt ceiling from the current limit of $31.4 billion (£25.2 billion) could lead to the US suspending social security payments and the wages of its federal and military employees. Default also threatens to wreak havoc on the global economy, affecting prices and mortgage rates in other countries.
The pause was widely seen as a trading ploy on Capitol Hill, but US financial markets fell on Friday in response to the news. The S&P 500 was down about 0.2% at 1:00 PM ET.
In exchange for their support for raising the debt ceiling, Republicans are demanding budget cuts of up to $4.5 trillion, which include eliminating many of Biden’s legislative priorities.
The White House has called the Republican proposal “a plan to destroy hard-working American families,” though it has indicated in recent days that it may make budget concessions.
But as the clock is ticking, the two parties are still far apart.
“Until people are ready to have tough conversations about how to move forward and do the right thing, we’re not going to sit here and talk,” Rip Graves said as he walked away.
“We need to move on from the White House and we don’t have a move yet,” House Speaker Kevin McCarthy, who was not present at the meeting, told reporters on Capitol Hill.
He added that the only avenue for the Republicans in those talks is the commitment of the United States to spend less money next year compared to the previous year.
President Biden hopes to seal a deal after he returns to the United States from the G7 summit in Japan on Sunday.
A White House official later said, “If both sides negotiate in good faith and realize they’re not going to get everything they want, an agreement is still possible.”
