Can the United States avert a debt default?

Key Points:

• President Biden and House Speaker Kevin McCarthy met on Tuesday for the first time in three months but failed to reach a consensus on raising the debt ceiling.
• The two sides remain at loggerheads over the issue, with Republicans refusing to vote to raise the ceiling unless Democrats agree to spending cuts.
• A default could devastate the economy, causing interest rates to rise, stock prices to fall, and the dollar's value to decline.
• The two sides are scheduled to meet again next week, but whether they can reach a compromise is unclear. If they do not, the United States could be headed for a debt default.

Biden and McCarthy reach no consensus on the debt ceiling as possible default looms

President Biden and House Speaker Kevin McCarthy met on Tuesday for the first time in three months but failed to reach a consensus on raising the debt ceiling. The two sides remain at loggerheads over the issue, with Republicans refusing to vote to raise the ceiling unless Democrats agree to spending cuts.

The meeting occurred amid growing concerns that the United States could default on its debt for the first time. The Treasury Department has said that it will run out of cash on June 15 if Congress does not act to raise the debt ceiling.

A default would devastate the economy, causing interest rates to rise, stock prices to fall, and the dollar's value to decline. It would also damage the United States' reputation as a reliable borrower and could lead to a global financial crisis.

Biden and McCarthy have been in a public feud over the debt ceiling for weeks. The president has accused Republicans of playing politics with the economy, while McCarthy has said that Democrats are trying to use the debt ceiling to ram through their partisan agenda.

The two sides are scheduled to meet again next week, but whether they can reach a compromise is unclear. The United States could be headed for a debt default if they do not.