President Joe Biden is set to meet with top congressional leaders, including House Speaker Kevin McCarthy, at the White House on Tuesday in an effort to avoid a default if the government fails to raise the debt ceiling. Both sides have shown little willingness to compromise, leading to concerns that the Treasury Department may be unable to pay its bills and cause the U.S. defaults on its debts for the first time in history.
On Wednesday, President Biden will travel to New York as part of his pressure campaign targeting moderate House Republicans who could prove crucial in reaching a compromise. Treasury Secretary Janet L. Yellen has warned that without action from Congress, the government could default as early as June 1.
Wall Street has mostly ignored this growing standoff since investors continue expecting lawmakers will reach a resolution before breaching the debt limit. However, Democrats and Republicans' public statements show how far apart they remain concerning an agreement.
The meeting between President Joe Biden and House Speaker Kevin McCarthy aims at discussing ways of increasing America's borrowing limit or potentially facing an unprecedented and devastating debt default that would impact not only national but also global economies.
Treasury Secretary Janet Yellen continues her media blitz warning about potential economic damage resulting from such a default. Comparisons are being made between these consequences and those experienced during the 2008 crash.
In addition to talks between political leaders, business groups have increased calls for swift agreement forging while deep spending cuts proposed by Republicans are anticipated by some Democratic lawmakers hoping this move proves unpopular enough among GOP members of Congress supporting raising debt limits without conditions attached.
As both sides prepare for their high-stakes meeting scheduled for Tuesday at The White House discussions might span over several weeks aimed at averting any historical precedents regarding federal government defaults due mainly because of demanding spending cut proposals presented by Republican representatives criticized by their Democratic counterparts labeling them irresponsible positions taken up against one another hardening over time.