May 23 (Reuters) – Republicans in the U.S. House of Representatives said there had been little progress in talks with the White House on raising the government’s $31.4 trillion debt ceiling, leaving the country at risk of defaulting on the debt in nine days.

Aides to President Joe Biden and Republican House Speaker Kevin McCarthy met again on Tuesday. The two parties are deeply divided over how to control the federal deficit, with Democrats arguing that wealthier Americans and businesses should pay more taxes while Republicans want spending cuts.

White House negotiators Shalanda Young, director of the Office of Management and Budget, and senior White House adviser Steve Ricchetti arrived at the Capitol for late morning talks. They did not speak to reporters, but Ricchetti said they were “back to work.”

The Treasury Department has warned that the federal government may not have enough money to pay all its bills by June 1, triggering a default that would hammer the U.S. economy and raise borrowing costs.

Rep. Garrett Graves, the Republican negotiator, said he had seen little progress.

“I think things just didn’t go well,” Graves told reporters. “They refuse to really change course, really cut spending, and that’s a red line

Biden and McCarthy talked about the need for bipartisan compromise during Monday evening’s meeting on the debt ceiling, even as they espouse policies that expose bipartisan divides.

“We reiterated that default is off the table and is the only way forward in good faith toward a bipartisan deal,” Biden said in a statement after Monday’s meeting, which he called “productive.”

U.S. stock indexes were lower on Tuesday morning on Wall Street and global markets were on edge due to a lack of clear progress.

Biden and Democrats want to freeze spending in fiscal year 2024 at the level adopted in 2023, arguing that would mean spending cuts because agency budgets cannot keep up with inflation. The idea was rejected by Republicans who wanted spending cuts.

Biden wants to reduce the deficit by raising taxes on the wealthy and closing tax loopholes for the oil and pharmaceutical industries. McCarthy said he would not approve a tax increase.

McCarthy told reporters on Monday that he expects to speak with Biden at least daily by phone.

If Biden and McCarthy reach a deal, they will have to sell it to their caucuses in Congress. Passing a deal through the House and Senate could easily take a week, requiring Biden to approve the bill before signing it into law.

on common ground

Unless Congress raises the debt ceiling and allows the federal government to borrow money to pay its bills, America will default on its obligations, plunging the nation into recession and plunging global financial markets into chaos.

Any deal to raise the cap would have to pass both houses of Congress and would therefore depend on bipartisan support. McCarthy’s Republicans control the House 222-213, while Biden’s Democrats hold the Senate 51-49.

Despite the obstacles, the two sides have found some common ground in several areas, including permitting reform, to help energy projects move forward.

On Monday, McCarthy said not all issues related to adding some permit reforms to the debt deal could be resolved and that talks on further reforms could continue later, ruling out a trade-off for renewable energy.

The two sides are also debating returning unused Covid relief funds and imposing tougher work requirements on two popular public welfare programs that help lift Americans out of poverty.

But the leaders cautioned that nothing had yet been agreed upon.

“It’s very important to recognize that urgency should be the order of the day. That’s not the vibe I’m getting right now,” said Rep. Patrick McHenry, Republican chairman of the House Finance Committee.

Report by Jared Renshaw; Editing by Heather Timmons and Lincoln Feist.

Our Standards: Thomson Reuters Trust Principles.

WASHINGTON, May 22 (Reuters) – President Joe Biden and House Speaker Kevin McCarthy failed to reach an agreement on Monday on how to raise the U.S. government’s $31.4 trillion debt ceiling within 10 days. Keep talking.

The Democratic leader and top congressional Republicans have struggled to strike a deal as the president pushes new taxes rejected by Republicans as McCarthy pressures the White House to agree to spending cuts in the federal budget that Biden considers “radical.”

Both sides stressed the need to avoid a default on a bilateral deal after Monday evening’s meeting and signaled they would continue to talk in the coming days.

A source familiar with the situation said White House negotiators returned to Capitol Hill Monday night to resume talks.

“We reiterated that default is off the table and is the only way forward in good faith toward a bipartisan deal,” Biden said in a statement after the meeting, which he called “productive.”

McCarthy told reporters after more than an hour of talks with Biden that negotiators were “going to get together and work through the night” trying to find common ground.

“I believe we can still go there,” McCarthy said. He is unwilling to consider Biden’s plan to reduce the deficit by raising taxes on the wealthy and closing tax loopholes for the oil and pharmaceutical industries, and focuses on cutting spending in the 2024 federal budget.

Democrats and Republicans have until June 1 to raise the government’s self-borrowing limit or trigger an unprecedented debt tranche that could bring on a recession that economists warn.

Treasury Secretary Janet Yellen on Monday offered a sobering reminder of how little time remains, saying the previous estimated default date was June 1 and that it was “highly likely” the Treasury would not be able to pay off all government obligations by early June. The debt ceiling has not been raised.

Republican Rep. Patrick McHenry, who was at the White House meeting, ruled out any partial budget deal to raise the debt ceiling. He said nobody was going to agree to anything until there was a final deal.

He said the tone of the Biden meeting was still very positive.

Any deal to raise the cap would have to pass both houses of Congress and would therefore depend on bipartisan support. McCarthy’s Republicans control the House 222-213, while Biden’s Democrats hold the Senate 51-49.

Failure to raise the debt ceiling could roil financial markets and trigger defaults that would raise interest rates on everything from car payments to credit cards.

[1/5] House Speaker Kevin McCarthy (R-CA) sits with U.S. President Joe Biden for debt ceiling talks in the Oval Office at the White House in Washington, May 22, 2023. REUTERS/Leah Millis

US markets rose on Monday as investors awaited updates on the talks.

If Biden and McCarthy come to an agreement, it will take several days to push the legislation through Congress. McCarthy said a deal must be reached this week to pass Congress and be signed into law by Biden to avoid default.

Cuts and clawbacks

Republicans favored discretionary spending cuts, new work requirements for some programs for low-income Americans and a clawback of COVID-19 aid approved by Congress but not yet spent in exchange for a debt ceiling increase to cover lawmakers’ costs. Previously approved spending and tax deductions.

Democrats want to keep spending steady at this year’s levels in 2024, while Republicans want to return to 2022 levels next year and limit spending growth in the coming years. A plan passed by the House last month would cut government spending by 8% next year.

Biden, who has made the economy a centerpiece of his domestic agenda and is running for re-election, has said he would consider spending cuts along with tax changes, but called the Republicans’ latest offer “unacceptable.”

The president tweeted that he will not support “Big Oil” subsidies and “rich tax cheats” while jeopardizing health and food assistance for millions of Americans.

Both sides must weigh any concessions against pressure from hard-line factions within their own parties.

Some members of the far-right House Freedom Caucus insisted on halting the talks, demanding that the Senate take up their House-passed legislation, which was rejected by Democrats.

McCarthy, who made extensive concessions to right-wing hardliners to win the speakership, risks being fired by members of his own party if he doesn’t like the cut deal.

After losing the 2020 election to Biden, former Republican President Donald Trump has pushed for a default if Republicans don’t meet all of their goals, downplaying any economic consequences.

Liberal Democrats have pushed back against any cuts that would harm families and low-income Americans. Hakeem Jeffries, the top House Democrat, accused Republicans of holding “hostage negotiations” with the negotiations and said he would seek Republican votes for a discharge petition that could raise the debt ceiling.

Biden has offered to freeze spending at this year’s levels, an offer rejected by Republicans, Jeffries said.

Reporting by David Morgan, Richard Cowan and Andrea Shalal; Written by Susan Hevey; Editing by Lisa Shumaker and Stephen Coates

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President Joe Biden and Republican House Speaker Kevin McCarthy on Monday evening failed to reach a fiscal deal to avoid defaulting on the US debt, but talks were set to continue, suggesting a deal could be reached.

The two met at the White House for a round of talks on a deal seen as critical to the U.S. and global economic outlook and the fate of financial markets.

“I think the tone was better tonight than any other time we’ve had discussions … We’ll still have some philosophical differences, but I felt it was productive,” McCarthy told reporters at the White House after the meeting. “We know the deadline. I think the President and I are going to talk every day. . . Until we do this.”

Biden later issued his own statement with the same assessment. “I just had a productive meeting with Speaker McCarthy about preventing default and avoiding a catastrophe for our economy,” Biden said. “We reiterated that default is off the table and the only way forward is in good faith toward a bilateral agreement.”

Earlier in the afternoon, Treasury Secretary Janet Yellen had warned that there was a “high chance” the US would be unable to pay all its bills by early June.

While Biden and McCarthy did not reach a final deal at the end of the meeting, they instructed staff to accelerate negotiations in an effort to seal an agreement that could pass both houses of Congress and be signed by the president.

McCarthy has refused to raise America’s $31.4tn debt ceiling, set by law, unless the White House and Democrats agree to deep spending cuts and new restrictions on eligibility for social safety net programs.

The standoff has dragged on for months, but only this month did Biden and the Republican president begin negotiations on a fiscal deal that could resolve the crisis. The president was forced to cut short a trip to Asia to return to Washington to continue negotiations.

The urgency for a deal became even clearer after Yellen repeatedly warned that time was running out before the Treasury ran out of money.

“The Treasury will not be able to meet all of the government’s obligations if Congress does not act to raise or suspend the debt ceiling by early June and before June 1,” Yellen wrote Monday afternoon. The latest in letters to Congress in this regard.

Both sides continue to blame each other for the recent conflict. The White House accused Republicans of being intolerant of “extreme” demands, and McCarthy accused Biden of backing down on his position.

While McCarthy has faced pressure from the right wing of his party not to make more concessions to the White House, some Democrats are urging Biden not to cave to Republicans. Several Democrats have called on the White House to repeal the 14th Amendment to the Constitution, which would “shall not call into question” the “sustainability” of the U.S. public debt and continue borrowing above the limit.

While Biden said Sunday he believes he has the “authority” to do that, he said it may not be a solution in the short term.

Private economists argue that the government has a little more room to do so compared to Yellen’s projections. Oxford Economics on Monday estimated the Treasury could “squeeze” until June 14.

However, it cautioned that there is “no margin for error” and estimates related to incoming receipts, cash balances and other abnormal activities are subject to change.

Meanwhile, economists at Goldman Sachs predict the Treasury’s cash holdings will fall below $30bn by June 8 or 9. “At that time, we believe the Treasury will have fully exhausted its funds at that time,” they wrote. A note on Friday.

WASHINGTON (AP) — President Joe Biden and House Speaker Kevin McCarthy are set to meet in a key moment at the White House on Monday afternoon, as Washington tries to raise the nation’s debt ceiling to avoid a budget compromise and a messy federal default..

White House negotiators met with McCarthy’s team for nearly three hours at the Capitol ahead of the session between the Democratic leader and the new Republican speaker. That will be crucial as they race to avert a debt crisis as soon as next week. The teams ended at noon, and no further talks were scheduled before the White House meeting.

After a weekend of start-and-stop talks, the two appeared upbeat as they faced a June 1 deadline.When the government has no money to pay its bills.

On Monday morning, McCarthy took a sharp edge, accusing Biden of refusing to engage in annual federal spending, a separate issue but related to the nation’s debt.

“What we need to do here is stop spending slavery,” McCarthy, R-Calif., told reporters when he arrived at the Capitol.

“With the Democrats and the president refusing to even negotiate, no family can operate this way,” he said. “That’s why we go from crisis to crisis.”

As McCarthy has said many times before: “We’re going to spend less than last year.”

The terms of the deal appear within reach, and negotiations have narrowed on the 2024 budget year deadline, which is critical to resolving the impasse. Republicans have insisted that next year’s spending should not exceed the current 2023 level, but Democrats refused to accept the steep cuts proposed by McCarthy’s team and the White House instead offered to keep spending flat.

A budget deal would open a separate vote to raise the debt ceiling, now at $31 trillion, to allow more borrowing to pay bills already incurred. Treasury Secretary Janet Yellen said Sunday that June 1 is a “hard deadline.”

Rep. Patrick McHenry, the top negotiator for the Republican Party of North Carolina, told reporters that a round of talks late Sunday went “reasonably well.”

“We know the deadline, we know the challenge,” McHenry, chairman of the House Financial Services Committee, said as he entered the morning session.

Three hours later, McHenry told reporters: “We’re at a very emotional point here, and the goal is to get something that can be signed into law.”

McHenry added, “Everybody knows that with divided government, there are tradeoffs.”

Biden and McCarthy spoke by phone as the president returned home on Air Force One after the Group of Seven summit in Japan on Sunday.. “That was great, and we’ll talk tomorrow,” Biden said in response to a shouted question upon his return late Sunday.

The call revived the talks, and negotiators gathered at the Capitol for 2 1/2 hours Sunday evening to say little of what they had left. Last week the financial markets took a tumble After the talks stopped.

“We will continue to work,” said Steve Ricchetti, an adviser to the president, as the White House team walked out of the talks late Sunday.

McCarthy, R-Calif., told reporters earlier Sunday that the call with Biden was “productive,” and Biden told a news conference before departing Japan: “I think we can reach an agreement.”

But McCarthy said, “I’ve been very clear with him from the beginning. We have to spend less than what we spent last year,” he said.

Earlier, Biden used his closing news conference in Hiroshima, Japan, to say he had done his part by agreeing to the spending cuts and warning, “It’s time for Republicans to accept that no deal was made just for them, individually. It’s partisan terms.”

“Now is the time for the other side to move on from their extreme position,” he said.

GOP lawmakers are holding tight to demands for sharp spending cuts with caps on future spending, rejecting alternatives proposed by the White House and calling for deficit reduction with new revenue from taxes.

McCarthy has privately insisted in his conversations with Biden that tax hikes are off the table

Republicans want next year’s spending to return to 2022 levels, but the White House has proposed keeping 2024 as it is now for the 2023 budget year. Republicans initially sought to impose spending limits for 10 years, though a recent plan reduced that to six. The White House wants a two-year budget deal.

A compromise on those topline spending levels would help give McCarthy to conservatives, while it would drive away the Democratic votes needed in a divided Congress to pass any bill.

Republicans also want work requirements for Medicaid The health care plan, though the Biden administration opposes it, says millions of people could lose coverage. The GOP also introduced new cuts to food assistance by limiting the ability of states to waive work requirements in areas with high unemployment. But Democrats have said any changes to work requirements for government assistance recipients would be a non-starter.

GOP lawmakers are also seeking cuts to IRS money, and would shift much of the spending cuts to other federal programs by exempting the defense and veterans accounts from cuts.

The White House countered by keeping defense and non-defense spending equal next year, which would save $90 billion in the 2024 budget year and $1 trillion over 10 years.

All parties are looking at the possibility of a package that includes a framework to ease federal regulations and speed up energy project developments.

McCarthy indicated that despite the White House’s push by Republicans to accept parts of their proposed immigration overhaul.

For months, Biden has refused to engage in negotiations on the debt ceiling, arguing that Republicans in Congress are trying to use the borrowing limit vote as leverage to get executive concessions on other policy priorities.

But as June approaches, Republicans put their own spending legislation on the table and the White House begins talks on a budget deal that could include an increase in the debt ceiling.

McCarthy faces a hard right that could reject any deal, which has led some Democrats to oppose any compromise with Biden and Republicans and to raise the debt ceiling himself to avoid default.

However, the President said he would rule out the possibility of invoking the 14th Amendment for the time being. As a solution, it is said to be an “unsettled” legal question and bound to the courts.

___

Miller reports and Associated Press writer Josh Bock contributed from Hiroshima, Japan. Associated Press writers Kevin Freking, Farnoosh Amiri, Colin Long and Will Weissert contributed to this report from Washington.

WASHINGTON — After speaking with President Joe Biden on the phone Sunday, House Speaker Kevin McCarthy, R-Calif., said he agreed to meet in person Monday afternoon to work toward a deal to raise the debt ceiling.

McCarthy and Biden discussed the debt ceiling in a call on Sunday as the president flew back on Air Force One from the G-7 summit in Japan after talks between senior White House aides and House Republicans failed to break an impasse last week.

“I think my discussion with the president was productive,” McCarthy told NBC News after their call, adding that the president had asked to meet in person on Monday and that he had accepted the offer.

“I think we can solve some of these problems,” McCarthy said. “But I’ve been very clear to him from the beginning that we need to spend less money than we spent last year.”

McCarthy said the two sides were “still estranged,” but he and the president had decided during their call to resume their talks.

“Let them brief the president and let him get some sleep. And he wanted to get together privately tomorrow, and I agreed to that, and we’ll do it sometime in the afternoon,” he said. “Time is of the essence.”

A White House official confirmed an upcoming Monday meeting at the White House between Biden and McCarthy, and said their staff would meet again Sunday at 6 p.m. to discuss remaining issues.

McCarthy praised White House negotiators for engaging in “very professional” discussions.

“I have a lot of respect for the people on the president’s team,” he said. “They’re bright, they’re articulate, they know what they’re doing. We may disagree philosophically, but we respect each other because we come from a place of principles. When you come from a place of principles, usually at the end of the day, you find common ground and your Policies can be held concurrently.

The call between Biden and McCarthy came after Treasury Secretary Janet Yellen said on NBC News’ “Meet the Press” in early June that the federal government had a “difficult deadline” to raise the debt ceiling. A deal could not be reached before the US ran out of money.

In my last letter to Congress, we expect not to be able to pay all our bills until the beginning of June and perhaps June 1st. And I’ll keep updating Congress, but I certainly haven’t changed my assessment,” Yellen said. “So I think it’s a tough deadline.”

During a press conference in Japan on Sunday, the president urged Republicans to “move from their extreme positions,” which he criticized in his opening remarks as “obviously unacceptable.”

“It’s time for Republicans to accept that there is no bipartisan agreement,” he said. “They need to move too.”

Republicans returned to the debt ceiling negotiating table Friday night after temporarily suspending talks with the White House that they said were “not productive.”

House Republicans want to force major spending cuts, part of the negotiations, which are opposed by Biden and have died on their way to the Democratic-controlled Senate.

Democrats are reluctant to accept a lower spending limit than the current level, a source familiar with the party’s position told NBC News last week. Even if a new spending deal fails and the government runs on autopilot through a continuing resolution, the party may prefer to maintain existing positions.

Rep. Garrett Graves, R-La., tapped by McCarthy to lead talks with the White House, told reporters Sunday that there had been “a lot of progress” in discussions on the debt ceiling.

“If you look at the laundry list of about 50 items, we’ve made a lot of progress,” Graves said. “Understanding each other’s positions, understanding the red lines. So I think we’ve actually been able to get closer than when we started.

BEIJING, May 21 (Reuters) – China’s cyberspace regulator said on Sunday that products made by U.S. memory chip maker Micron Technology ( MU.O ) failed its network security review and will bar operators of critical infrastructure from purchasing from the company.

China’s broad definition of critical information infrastructure includes sectors ranging from transportation to finance.

“The review found that Micron’s products contain serious network security risks, which pose significant security risks to China’s critical information infrastructure supply chain, affecting China’s national security,” the Cyberspace Administration of China (CAC) said in a statement.

Micron said it had received the CAC’s notice to review the company’s products sold in China and “look forward to continued discussions with the Chinese authorities.”

The CAC did not provide details on what risks it identified or which Micron products would be affected.

China announced in late March that it was reviewing Micron’s products. At the time the company said it was cooperating and that its business operations in China were normal.

The US and Chinese governments are at loggerheads over chip technology. Washington has imposed a series of export restrictions on chipmaking technology to China and has taken steps to block Micron rival Yangtze Memory Technologies from buying some American components.

Micron gets about 10% of its revenue from China, but it’s unclear whether the decision will affect the company’s sales to non-Chinese customers in the country.

According to analysts, a large portion of Micron’s products flow into China and are used by non-Chinese companies in products manufactured there.

In September 2021 China imposed rules aimed at protecting critical information infrastructure, requiring its operators to comply with stricter requirements in areas such as data protection.

Beijing has broadly defined the industries it considers “vital,” such as public communications and transportation, but it has not specified exactly what type of company or business purpose it would be used for.

Reporting by Kevin Yao; Editing by Elaine Hartcastle

Our Standards: Thomson Reuters Trust Principles.

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By Associated Press

May 21, 2023 | 2:42 am

At least nine people were killed and dozens injured after soccer fans pushed through an entrance gate at a Salvadoran league quarterfinal on Saturday.

In a preliminary report via Twitter, the national civil police said nine people died in the match between the Alianza and FAS clubs at the Monument Stadium in Cuscatlan, 25 miles northeast of the capital.

Police said the condition of at least two of the injured who were admitted to the hospital was critical.

Carlos Fuentes, spokesman for the Rescue Commandos First Aid Group, also confirmed the death.

“We can confirm that nine people died – seven men and two women – we visited more than 500 people, and more than 100 people were taken to hospitals, some of them seriously,” Fuentes said.

The game was halted for about 16 minutes as fans in the stands waved frantically to attract the attention of those on the field and began to bring the injured out of the tunnel and onto the pitch.

Local television broadcast live footage after being mobbed by Alianza fans. Dozens landed on the field receiving medical treatment.

The fans who survived the crush stood on the field frantically waving their shirts and trying to criticize those lying on the grass unable to move.

Pedro Hernández, head of El Salvador’s first division, said the initial information he received was that fans had been pushed through a gate into the stadium, causing a stampede.

“It was an avalanche of fans past the gate. Some were still under the metal in the tunnel. Others made it to the stands and then onto the field and suffocated,” an unidentified volunteer from the Rescue Commandos first aid team told reporters.

National Civil Police Commissioner Mauricio Ariza Chicas said a criminal investigation will be conducted at the scene of the tragedy in collaboration with the Attorney General’s Office.

“We are going to investigate from ticket sales, entry into the stadium, but especially from the south zone,” he said, where the gate was opened.

In a statement, the Salvadoran Football Federation said it regretted the incident and expressed its support for the families of the victims.

CNN
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Ukrainian President Volodymyr Zelensky met Indian Prime Minister Narendra Modi at the Group of Seven (G7) summit in Japan on Saturday, the first face-to-face meeting between the two since the start of Russia’s invasion.

Modi – who refused to condemn the invasion – said India would “do everything we can” to end the war.

“The war in Ukraine is a big issue for the whole world,” he said. “It has had many consequences all over the world. But I don’t think it’s just an economic or political issue. For me, it’s a humanitarian issue.

For his part, Zelensky invited Modi to join Ukraine’s peace efforts to end the war against Russia.

Zelensky’s in-person visit to the G7, which was not confirmed by host country Japan as of Saturday morning – will include member states Canada, France, Germany, Italy, Japan, the United Kingdom and the United States that already support Ukraine – and press them for continued military aid.

But it also gives Zelenksy an opportunity to gain support for Ukraine and its vision for peace with the leaders of a handful of other countries attending the summit — some of whom have not joined the West in imposing sanctions against Russia or India. They refused to condemn Russia at the United Nations.

India has historically been a major buyer of Russian arms and has longstanding ties with Moscow. It also increased purchases of Russian energy – a key economic lifeline for President Vladimir Putin’s government, a key source of revenue the West imposes extensive restrictions on.

Although New Delhi sent humanitarian aid to Ukraine during the war, it has abstained from UN resolutions calling for its withdrawal and condemning its invasion.

Analysts say winning the support or understanding of leaders like Modi may be Zelensky’s main motivation to attend the G7 summit. Other participating countries include Indonesia, Australia, Brazil, Korea and Vietnam.

In Modi’s case, closer ties with Russia are likely to pressure Putin or keep his economy running.

Last year, when he met the Russian leader face-to-face during the Shanghai Cooperation Organization summit in Uzbekistan in September, Modi spoke to Putin of the need to “follow the path of peace”. The Indian side – seen at the time as a sign of impatience from New Delhi as the conflict dragged on.

But months later, the Indian leader, neither openly condemning the Kremlin nor calling for a withdrawal from Russian territory, was determined to tread carefully.

Modi spoke to Zelensky on the phone several times after Russia’s invasion, most recently in December, when the Indian leader reiterated his call for a “ceasefire” and “dialogue” to resolve the conflict.

Zelensky’s peace plan, by contrast, calls for the restoration of Ukraine’s internationally recognized borders and the withdrawal of Russian troops.

Western leaders have criticized calls for a ceasefire that does not include the withdrawal of Russian troops, saying they amount to helping Moscow consolidate territory it has annexed.

Zelensky also attended an Arab League summit in Saudi Arabia on Friday, where he expressed sympathy for leaders in Saudi Arabia who are “turning a blind eye” to the war in Ukraine.

At the G7, Zelensky plans to sit down with the leaders of the G7 member states, Canada, France, Germany, Italy, Japan, the UK and the US, for a major session on peace and stability. countries, Japan said on Saturday.