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Biden and Republican House Speaker Kevin McCarthy hold talks to discuss the ‘catastrophic’ debt crisis

United States President Joe Biden and Republican House Speaker Kevin McCarthy engaged in talks to address the “catastrophic” debt crisis. However, the negotiations concluded on Tuesday after less than an hour, without making any significant progress.

The White House expressed Biden’s optimism, stating that he believes a responsible and bipartisan budget agreement is possible if both sides negotiate in good faith. On the other hand, McCarthy informed reporters that there is still a substantial amount of work to be done in order to resolve the high-stakes standoff with Biden regarding the borrowing limit.

McCarthy noted that he found the recent discussions to be slightly more productive, acknowledging the limited timeframe available to reach an agreement. He highlighted Biden’s goal of achieving a debt ceiling agreement before June 1 to prevent an economic disaster.

In an effort to resolve the debt ceiling standoff, Republican Congressman Garrett Graves is set to meet with White House counselor Steve Ricchetti and Office of Management and Budget Director Shalanda Young, as informed by McCarthy.

The Treasury has issued warnings about the severe consequences if the country runs out of funds to meet its debts. This scenario would result in the inability to pay federal employees and could lead to increased interest rates, impacting businesses, mortgages, and global markets.

Treasury Secretary Janet Yellen cautioned that the nation could potentially begin defaulting on its debts as early as June 1, while the nonpartisan Congressional Budget Office has predicted June 15 as the deadline.

The White House stated that Biden has instructed his staff to continue daily discussions on unresolved issues and that he plans to consult with Republican leaders upon his return from the G7 meetings.

Republicans have insisted on significant expenditure reductions in exchange for their support in raising the debt ceiling. They have rejected Democratic requests for a “clean” increase without any additional conditions.

While the president is scheduled to depart on Wednesday for a three-day G7 conference in Japan, it was decided on Tuesday that Biden would not continue with subsequent stops in Papua New Guinea and Australia, according to a source.

White House national security spokesperson John Kirby confirmed that Biden would depart for Japan as planned but the following stop in Australia is currently being reevaluated. The rest of the trip is under consideration, and although no cancellation has been confirmed yet, it remains a possibility.

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