Republican Speaker of the House Kevin McCarthy accused US president Joe Biden of not wanting a deal on the debt ceiling, as a meeting at the White House involving the two leaders was postponed until next week.
Speaking to reporters at the US Capitol late on Thursday, McCarthy said Biden and Chuck Schumer, the Democratic Senate leader, had “no plan, no proposed savings and no clue” on how to avert the looming fiscal crisis.
“Apparently, President Biden doesn’t want a deal, he wants a default,” he added.
McCarthy’s combative comments came shortly after the White House confirmed Democratic and Republican staffers would keep working on the debt ceiling but “all the principals” — Biden, McCarthy, Schumer, Republican Senate leader Mitch McConnell and Democratic House leader Hakeem Jeffries — had now “agreed to meet early next week”, instead of Friday, as planned.
One person familiar with the meetings had called the change in schedule a “positive development” and insisted talks about raising the debt ceiling were “progressing”.
But McCarthy was more pessimistic. He said he thought it would be “productive for the staff to meet again”, but added: “I have not seen from . . . the White House that they want a deal.”
The speaker told reporters all parties in the negotiations decided to postpone the meeting, and noted that one unnamed key player would no longer be able to attend on Friday because of a funeral.
“I don’t think there’s enough progress for the leaders to get back together,” he said.
McCarthy’s comments underscored an apparent lack of common ground between the two parties as the deadline to avert a default grows closer. Democrats have called for a “clean” bill to raise the borrowing limit without preconditions. Republicans insist any raising of the debt ceiling needs to be tied to steep spending cuts.
Earlier on Thursday, JPMorgan chief executive Jamie Dimon warned uncertainty over the debt ceiling could spark “panic” in the markets.
Dimon was in part reacting to former president Donald Trump, who in a televised town hall on Wednesday night implored Republicans to let the US default unless Democrats capitulate to demands for “massive” spending cuts.
The debt ceiling was “one more thing [Trump] doesn’t know very much about”, Dimon said, after the former president and current frontrunner for the Republican party nomination for the White House in 2024 brushed aside concerns about the economic ramifications of an unprecedented default.
“It’s really psychological more than anything else,” Trump said on Wednesday night. “And it could be really bad, it could be maybe nothing, maybe it’s a bad week, or a bad day, who knows?”
The boss of the biggest US bank told Bloomberg TV on Thursday a default would be “catastrophic”, and warned that as the government gets closer to the fiscal cliff, “you will have panic”.
US Treasury secretary Janet Yellen has warned the government risks running out of money as soon as 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 so badly undermine the US and the global economy that I think it should be regarded by everyone as unthinkable.”
Separately, the IMF on Thursday warned of “very serious repercussions” in the event of a default when the global economy is in a “very difficult” position, mired by low growth and high inflation.
“We strongly encourage the parties in the US to come together to reach a consensus to urgently address this matter,” Julie Kozack, director of communications at the multilateral lender, told reporters.
Dimon said JPMorgan had assembled a “war room” to meet once a week to assess the risks related to a potential default. He added the group was likely to meet more frequently as the so-called X-date approaches.
