Biden set to cancel overseas trips as deadline looms for US government to run out of money

US president Joe Biden is set to cancel a planned visit to Australia and Papua New Guinea as the date by which the US Government could run out of money looms nearer.

The president met senior congressional leaders on Tuesday afternoon in a bid to resolve the impasse over raising the US debt ceiling.

There was no deal reached at the talks.

However, speaking afterwards the republican speaker of the House of Representatives Kevin McCarthy said it was “possible” to get an agreement by the end of the week, although he maintained that the two sides were still “far apart”.

The best way to finance a new car

---

French investor pays €28.6m for Dublin and Kilkenny investments

---

Tricky judgments on when to reduce interest rates

---

Wild Duck theatre and pub in Dublin’s Temple Bar seeking €8m

---

Unless a deal is reached, the US could soon run out of funds to pay its bills.

The Biden administration has argued that a US debt default could trigger economic turmoil domestically and across the world.

Mr McCarthy said it had been agreed at the talks that an aide appointed by the president will now negotiate directly with his representative.

“The president changed the scope of who is negotiating”, he said.

The senate majority leader Chuck Schumer, a Democrat, said after the talks that everyone in the room on Tuesday understood that “default would be a disaster”.

The president is scheduled to leave on Wednesday for the G-7 summit in Japan.

However planned trips to Australia and Papua New Guinea which were scheduled to take place after the visit to Japan have now been cancelled. Mr Biden is now expected to arrive back in Washington on Sunday or Monday.

Even if a deal is reached between the White House and the speaker on raising the debt ceiling, politicians in Washington will be in a race to pass legislation to give effect to any agreement.

As of now, the House of Representatives is scheduled to be in session – present in the Capitol and ready to vote – for only six more days before the end of the month. The Senate is scheduled to be in session for just five more days before the end of the month.

The US Treasury has estimated that the country could run out of money to pay its bills as soon as June 1.

Before the meeting, John Kirby, spokesman for the National Security Council, said the administration was “re-evaluating” Mr Biden’s plans to go to Papua New Guinea and Australia.

Mr. Schumer called a default the “nightmare scenario.”

“We all know these things are fast approaching the closer we get to June 1,” he said. “Congress cannot, under any circumstances, fail its obligation to protect the full faith and credit of the United States.”

Republicans have been seeking significant spending cuts in return for any increase in the official debt ceiling.

On Sunday, Mr Biden appeared at least willing to entertain some republican proposals.

Asked whether he would consider proposals put forward by republicans in the House of Representatives to introduce more work requirements for those availing of social programmes, the president did not reject this completely.

Rather, he pointed to his own Senate record of voting for welfare work requirements in the 1990s.

“I voted for tougher aid programmes that’s in the law now, but for Medicaid [the federal and state programme to help meet medical costs for those on lower incomes] it’s a different story. And so I’m waiting to hear what their exact proposal is.”

However some members of his own Democratic Party in the House of Representatives have expressed deep unhappiness with any additional work requirements.

The White House said at a press briefing last week that a debt default would “threaten eight million jobs, a recession, retirement accounts and social security and Medicare payments”.

At present, the US Government is limited by law to borrowing no more than $31.4 trillion (€28.5 trillion). The US is coming perilously close to reaching that limit.

In a letter to Congress last week, treasury secretary Janet Yellen warned the US might not be in a position to pay its bills from as early as the beginning of June.