Biden's team reports 'progress' in US debt ceiling talks

U.S. President Joe Biden delivers remarks, in Washington
U.S. President Joe Biden delivers remarks on the economy from an auditorium on the White House campus in Washington, U.S. January 12, 2023. REUTERS/Jonathan Ernst

HIROSHIMA, Japan, May 19 (Reuters) - Democratic negotiators told President Joe Biden on Friday that they are making "steady progress" in talks with Republicans aimed at avoiding a U.S. default, according to a White House official.

Biden received an update on the talks with aides to Republican House of Representatives Speaker Kevin McCarthy on Friday morning in Japan, where he is traveling for the Group of 7 (G7) summit, officials said.

"The president’s team informed him that steady progress is being made," according to one of the officials, who declined to be named.

"The president directed his team to continue pressing forward for a bipartisan agreement and made clear the need to protect essential programs for hardworking Americans and the economic progress of the past two years as negotiations head into advanced stages. He remains confident that Congress will take necessary action to avoid default."

Republicans have refused to vote to lift the debt ceiling past its $31.3 trillion limit unless Biden and his Democrats agree to spending cuts in the federal budget.

The U.S. government may default on some debts as early as June 1 unless Congress votes to lift the debt ceiling, and economists fear the country will slide into a recession.

Biden cut his trip to Asia short and now plans to return home on Sunday to finish the negotiations, eliminating stops in Papua New Guinea and Australia aimed at countering China's influence in the region.

In the meantime, White House adviser Steve Ricchetti, budget director Shalanda Young and legislative adviser Louisa Terrell are leading discussions for the administration.

A similar 2011 standoff over the debt limit led to a historic downgrade of the U.S. credit rating, sparking a sell-off in stocks and pushing the government's borrowing costs higher.

The current deadlock has rattled investors, sending the cost of insuring exposure to U.S. government debt to record highs. A Reuters/Ipsos poll completed on Monday found that three-fourths of Americans fear a default would take a heavy toll on families like theirs.

Reporting by Jeff Mason; Writing by Trevor Hunnicutt; Editing by Jacqueline Wong

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Jeff Mason is a White House Correspondent for Reuters. He has covered the presidencies of Barack Obama, Donald Trump and Joe Biden and the presidential campaigns of Biden, Trump, Obama, Hillary Clinton and John McCain. He served as president of the White House Correspondents’ Association in 2016-2017, leading the press corps in advocating for press freedom in the early days of the Trump administration. His and the WHCA's work was recognized with Deutsche Welle's "Freedom of Speech Award." Jeff has asked pointed questions of domestic and foreign leaders, including Russian President Vladimir Putin and North Korea's Kim Jong Un. He is a winner of the WHCA's “Excellence in Presidential News Coverage Under Deadline Pressure" award and co-winner of the Association for Business Journalists' "Breaking News" award. Jeff began his career in Frankfurt, Germany as a business reporter before being posted to Brussels, Belgium, where he covered the European Union. Jeff appears regularly on television and radio and teaches political journalism at Georgetown University. He is a graduate of Northwestern University's Medill School of Journalism and a former Fulbright scholar.