Biden said in Japan late on Friday Washington time that he continued to believe a default could be avoided. “I still believe that we will be able to avoid a default and that we will manage to do something decent,” Biden told reporters in Hiroshima, Japan, where he is attending a meeting of leaders of the Group of Seven rich countries. Biden was optimistic despite the fact that the White House acknowledged that there are still “serious differences” with the Republicans, who control the House of Representatives.
House Speaker Kevin McCarthy has said progress is needed to change the “trajectory” of US government deficit spending and rapidly rising debt.
Republicans are pushing for deep spending cuts in exchange for raising the government’s self-imposed borrowing limit, a move regularly needed to cover the costs of spending and tax cuts previously approved by lawmakers.
Republicans control the House by a narrow margin, while Biden’s Democrats hold a slim majority in the Senate, making it difficult to reach a deal that passes both houses.
Democrats have been pushing to keep spending at this year’s levels, while Republicans want to return to 2022 levels. A plan passed by the House last month would cut a wide swath of public spending by 8% a year. next.
Democrats say that would force average cuts of at least 22% in programs like education and law enforcement, a figure that top Republicans have not disputed.