Debt Ceiling Negotiations: What You Need to Know

President Joe Biden expressed confidence that negotiators would reach an agreement to avoid a catastrophic default, even as House Speaker Kevin McCarthy criticized his decision to travel to Japan for an international summit.

“I’m confident that we’ll get the agreement on the budget and that America will not default,” Biden said Wednesday at the White House, shortly before departing to Hiroshima, Japan for a Group of Seven leaders summit.

On Capitol Hill, McCarthy and other Republican lawmakers criticized Biden for his decision to travel, with the House speaker labeling the president “a big obstacle” to an agreement.

“Mr. President, stop hiding, stop traveling,” McCarthy said.

On Tuesday, Biden and congressional leaders agreed to a new narrower round of staff-level talks with hopes of reaching a bipartisan deal to avoid an unprecedented US default. The US president also announced he was canceling planned stops in Australia and Papua New Guinea, and would return to Washington by the beginning of next week for continued negotiations.

McCarthy also said he remained hopeful a deal could be reached, and he planned to stay engaged with negotiations. Biden, for his part, said he planned to remain in close contact with the speaker and negotiators as he traveled overseas.

Both lawmakers and White House officials have expressed cautious optimism in recent days, and stocks rose and Treasuries fell Wednesday on hopes of a breakthrough. Still, the Treasury Department has warned the US could breach the debt ceiling as soon as June 1. Economists have warned that a default would spike borrowing costs, rattle markets and prompt widespread job losses.

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