US President Joseph Biden and House of Representatives speaker Kevin McCarthy remain locked in negotiations of whether to increase the debt ceiling. The ceiling, which was enacted in 1917 during World War I, is a legislative cap on how much the government can borrow. The US hit the limit, which currently sits at $31.4tn, on 19 January 2023.
Fears over whether a decision will be reached in time are rising as the default date set for 1 June is fast approaching. Failure to raise the debt ceiling would result in the US Treasury department not being able to settle its obligations which include payment of government employees, social grants, and businesses that are contracted to the state.
Republican representative and chief negotiator during the talks, Garret Graves, identified the biggest obstacle as finding agreement on spending cuts, which Speaker McCarthy demanded in exchange for increasing the debt cap.
Negotiators have been meeting throughout the week met at the White House trying to reach a consensus.