No easy way out from US debt ceiling noise

Republicans are still divided over to what extent they should adopt hardline stance on the US debt ceiling, but the significant development is that they were united on Wednesday in one remarkable thing; namely their uniform demand that the Democratic President Joe Biden should agree to negotiate on spending as part of any deal.

Hardline Republican conservatives have the power to block any deal in the narrowly divided House. They want to force deep spending cuts on Biden and the Democratic-led Senate in exchange for an agreement to avoid default on the $31.4 trillion debt.

Some moderates want to deal with the issue more carefully in order to avoid any potential damage to the US economy, but even they contend their party will not support a debt agreement without negotiations on spending. Republicans are convinced that Biden also cannot refuse to negotiate. In other words; if he refuses to negotiate, there will be no Republican support for anything.

The federal government on January 19 came close to its $31.4 trillion borrowing limit set by Congress, and the Treasury Department has warned that it may only be able to pay all the government’s bills through early June, at which point the world’s biggest economy could be at risk of failing to meet its obligations, including on its debt securities.