WASHINGTON (Reuters) - Vital negotiations to lift the $14.3 trillion U.S. debt ceiling will resume next week, the White House said on Friday, after other visible efforts among lawmakers to strike a deal bogged down and were suspended.
Vice President Joe Biden will hold the third round of talks with senior Democratic and Republican lawmakers on Tuesday, under scrutiny from investors worried that failure to lift the borrowing limit could trigger a damaging debt default.
“He looks forward to those negotiations continuing. They’ve been constructive and productive so far, and we hope that continues to be the case,” White House press secretary Jay Carney told reporters.
The United States bumped up against the congressionally mandated $14.3 trillion borrowing ceiling on May 16, but has been able to keep functioning and avoid a default through special accounting measures.
However, the administration warns this room for maneuver will run out on August 2, at which point the United States risks starting to default on its debt obligations.
Biden’s talks are now the only visible discussions still taking place around Washington to craft measures to cut the U.S. deficit and win enough Republican votes in Congress to lift the debt limit.
Talks among a bipartisan “gang” of six senators stalled this week when Republican Senator Tom Coburn from Oklahoma departed.
On Thursday the Democratic-controlled Senate put its annual budget process on hold to allow the Biden talks to take the lead on working out a compromise between Republicans, who want deep spending cuts, and Democrats, who want tax-raising revenues to play a role in curbing the deficit.
Carney said the Biden-led talks “will be the vehicle for an agreement, we’re optimistic about that, but obviously there have been a lot of important contributions from others not actually in the room.”
A White House official said the talks would be held on Tuesday afternoon on Capitol Hill.
House of Representatives Speaker John Boehner, the top Republican in Congress, says spending cuts must exceed any increase in the debt ceiling.
This sets a high bar to win his support. The United States borrows roughly $125 billion each month and the U.S. Treasury sees a $2 trillion increase in the debt ceiling needed to last through the November 2012 elections.