Republican Speaker of the House Kevin McCarthy accused US President Joe Biden of not wanting a deal on the debt ceiling, as a White House meeting involving the two leaders was postponed until next week.
Speaking to reporters at the US Capitol late Thursday, McCarthy said Democratic Senate Leaders Biden and Chuck Schumer have “no plan, no proposed savings and no clue” on how to avert the escalating financial crisis.
“Obviously, President Biden doesn’t want a deal, he wants a default,” he added.
McCarthy’s combative comments came shortly after the White House confirmed that Democratic and Republican staffers would continue to work on the debt ceiling but that “all the principals” — Biden, McCarthy, Schumer, Republican Senate Leader Mitch McConnell and Democratic House Leader Hakeem Jeffries — now ” Agreed. To meet early next week”, instead of Friday, as planned.
A person familiar with the meetings called the change in schedule a “positive development” and insisted that talks about raising the debt ceiling were “progressive.”
But McCarthy was more pessimistic. He said he thought it would be “productive for the staff to meet again,” but added: “I . . . the White House that they want a deal.
The speaker told reporters that all parties in the talks decided to postpone the meeting, noting that an unnamed key player could no longer attend on Friday because of a funeral.
“I don’t think there’s enough progress for the leaders to come back together,” he said.
McCarthy’s comments underscored the apparent lack of common ground between the two sides as the deadline to avoid default approaches. Democrats have called for a “clean” bill to raise the borrowing limit without preconditions. Republicans insist that any increase in the debt ceiling needs to be paired with drastic spending cuts.
Earlier on Thursday, JPMorgan Chief Executive Jamie Dimon warned that uncertainty over the debt ceiling could cause “panic” in markets.
Dimon was partly reacting to former President Donald Trump, who urged Republicans in a televised town hall Wednesday night to allow the U.S. to default unless Democrats accede to demands for “huge” spending cuts.
The debt ceiling was “one more thing [Trump] Don’t know much about”, said Dimon, the former president and current front-runner for the Republican nomination for the White House in 2024, brushing aside concerns about the economic implications of an unprecedented default.
“It’s really more psychological than anything else,” Trump said Wednesday night. “And it could be really bad, it could be nothing, it could be a bad week, or a bad day, who knows?”
The boss of the biggest US bank told Bloomberg TV on Thursday that a default would be “catastrophic”, and warned that as the government moves closer to the fiscal cliff, “you’re going to have panic”.
US Treasury Secretary Janet Yellen has warned that the government risks running out of money next month if Congress does not raise the debt ceiling. Ahead of the G7 meeting of finance ministers in Japan on Thursday, she said: “The notion of defaulting on our debt is something that would weaken the US and the global economy so badly that I think everyone should consider it unthinkable.”
Separately, the IMF on Thursday warned of “very serious consequences” in the event of a default at a time when the global economy is in a “very difficult” position due to low growth and high inflation.
“We strongly encourage the parties in the US to come together to reach a consensus to resolve this matter urgently,” Julie Kozek, the multilateral lender’s director of communications, told reporters.
Dimon said JPMorgan assembled a “war room” to meet once a week to assess risks related to potential defaults. He added that the group is likely to meet more frequently as the so-called X-date approaches.
