Biden confident US will avoid debt default

US President Joe Biden expressed confidence on Wednesday that the country will avoid a catastrophic debt default. He stated that talks with congressional Republicans have been productive as he prepared to leave for a global summit in Japan.

Productive talks with congressional Republicans

Biden said from the Roosevelt Room of the White House that he is confident that the US will get an agreement on the budget and avoid default. He added that he and lawmakers will come together because there is no alternative. His remarks came just before he departed Washington for the Group of Seven summit in Hiroshima, Japan.

Negotiators working to strike an agreement

The president and House Speaker Kevin McCarthy tasked a handful of negotiators to try and close out a final deal, with negotiations beginning late Tuesday. Those people include Steve Ricchetti, counselor to the president; legislative affairs director Louisa Terrell and Office of Management and Budget director Shalanda Young for the administration, and Rep. Garret Graves, R-La., a close McCarthy ally, for the Republicans.

Debt limit increase needed

Negotiators have been scrambling to strike an agreement that would unlock a path forward for raising the debt limit by June 1. The Treasury Department says the US could begin defaulting on its obligations and trigger financial chaos if an agreement is not reached. The national debt currently stands at $31.4 trillion. An increase in the debt limit would not authorize new federal spending; it would only allow for borrowing to pay for what Congress has already approved.

Short timeline for agreement

House Speaker Kevin McCarthy told CNBC’s “Squawk Box“ on Wednesday that he thinks at the end of the day, the US will not have a debt default. However, the timeline is very short, and negotiators have been working hard to reach an agreement before the June 1 deadline.

Overall, the US is working to avoid a catastrophic debt default, and negotiations are ongoing to reach an agreement before the deadline.

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