Republicans Report Minimal Advancement in Debt Ceiling Discussions with White House

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US Debt Ceiling: Difficult Negotiations and Risk of Default in Nine Days

On May 23, 2023, Republicans in the U.S. House of Representatives reported struggling to make progress in negotiations with the White House over raising the government’s $31.4 trillion debt ceiling. With the nation facing the risk of default in as soon as nine days, the two parties remain deeply divided over how to rein in the federal deficit.

Democrats and Republicans at Odds Over Spending Cuts and Tax Increases

Democrats argue that wealthy Americans and businesses should pay more taxes, while Republicans insist on spending cuts. As the Treasury Department warns of a potential default that could severely impact the U.S. economy and push borrowing costs higher, Republican negotiator Representative Garret Graves admits to seeing little progress in the talks.

Wall Street and Global Markets on Edge

The lack of clear progress continues to weigh on Wall Street, with U.S. stock indexes opening lower on Tuesday morning and global markets on edge. President Joe Biden and House Speaker Kevin McCarthy remain hopeful for a bipartisan compromise, despite their differing stances on spending cuts and tax increases.

Searching for Common Ground

With a bipartisan deal necessary to raise the debt ceiling and prevent a default that could send the nation into recession and create chaos in global financial markets, the two sides have found common ground on issues such as permit reform for energy projects. However, leaders caution that no agreements have been reached yet.

Original Story at www.reuters.com – 2023-05-23 15:34:00