D-10... US Debt Ceiling Agreement Fails Again "Will It Prevent Catastrophe?"

Amid repeated warnings of a potential U.S. debt default, the third round of negotiations between President Joe Biden and the Republican Party on raising the debt ceiling ended without any progress. As efforts to prevent a catastrophic outcome over the debt ceiling increase accelerate, attention is focused on whether an agreement can be reached within this week.

According to major foreign media on the 22nd (local time), President Biden and Republican House Speaker Kevin McCarthy met at the White House at 5:30 p.m. and discussed the debt ceiling increase for about an hour. This was the third meeting held as the tentative deadline for the deadlocked negotiations approached in ten days, but like the meetings on the 9th and 16th, they failed to narrow their differences. Their working teams continued relay negotiations for about two hours on the morning of the same day following the weekend.

Both sides agreed on the fundamental premise that "there will be no default," but they have made no progress on the method to achieve this. President Biden said in his opening remarks, "We talked about the need for bipartisan agreement," and added, "I am optimistic that we will make progress." He also emphasized, "We also need to look at tax loopholes," and "The wealthy must pay their fair share of taxes." Speaker McCarthy told reporters after the White House meeting, "We had productive discussions, but we have not yet reached an agreement," and stressed, "Conversations between the working teams will continue."

U.S. President Joe Biden (right) and Republican Speaker of the House Kevin McCarthy. [Image source=AFP Yonhap News]

Regarding the meeting, it is reported that there was no smooth agreement on additional cuts related to low-income meal support programs proposed by the Republicans. The Republicans have insisted on cutting some programs supporting low-income groups and recovering COVID-19 relief funds during the negotiations. Regarding next year's government spending, the Democrats want to maintain this year's level, but the Republicans continue to insist on cuts to the previous year's level.

President Biden, who is up for re-election next year, has presented a basically flexible stance on negotiations, including some spending cuts, but he has clearly stated that he cannot accept the current Republican proposal.

Foreign media have evaluated that both negotiating parties are politicizing the debt ceiling and pushing the situation to extremes. The White House, which has been pressuring the Republicans with the negotiation deadline, has stepped back from its previous position of treating the debt ceiling and fiscal deficit as separate issues, under pressure to actively engage in negotiations. However, with the next year's election approaching, the Republicans' calculation that a default could shake the economy and damage the Democrats is also acting as an obstacle to reaching an agreement. There are pessimistic views that the perception that a default is politically advantageous for one's own camp could irresponsibly lead to neglecting the default.

Although the so-called 'X-Day,' the date Treasury Secretary Janet Yellen identified as when available funds will be exhausted, is approaching on the 1st of next month, it is expected that the U.S. will not immediately fall into default once the date arrives. X-Day refers to a de facto national default when the government completely loses its spending ability and cannot even pay interest on existing debt, but the exact date is variable depending on tax revenues and other factors.

This content was produced with the assistance of AI translation services.