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President Joe Biden’s visit to Australia for the Quad meeting this month has been placed in doubt because of ongoing negotiations between the White House and the Republican Party in Congress over lifting the US debt ceiling.
Asked in a White House press conference if the debt ceiling debate could prevent him travelling abroad for the G7 meeting in Japan, a stop on the same trip to Australia, Biden said: “It is possible, but not likely.”
US President Joe Biden has warned his trip to Australia could be scuttled by the US debt debate.Credit: AP
“In other words, if somehow we got down to the wire and we still hadn’t resolved this, and the due date was in a matter of – when I was supposed to be away, I would not go. I would stay until this gets finished.”
Biden told reporters he was still committed to the trip. “But obviously this is the single most important thing that’s on the agenda.”
Biden is due to attend the May 24 meeting with Prime Minister Anthony Albanese, Indian PM Narendra Modi and Japanese PM Fumio Kishida.
From left: Senate Minority Leader Mitch McConnell and House Speaker Kevin McCarthy speak to reporters outside the White House.Credit: AP
The Quad is a gathering between the United States, Australia, Japan, and India aimed at strengthening ties and addressing shared concerns in the Indo-Pacific region. It’s considered a crucial mechanism for the region to coordinate a strategic response to a more assertive China.
However, the US debt debate has emerged as a looming political crisis for the country and moment of increased risk for global markets. By law, the US government has to raise its borrowing limits to cover the $US31 trillion ($47 trillion) of government debt, driven up by robust infrastructure spending and services.
In a replay of past battles of the US debt, Republicans are using the impasse as an opportunity to extract cuts in spending from a Democratic presidency. Without congressional action to increase the limit, the US could default on its debt.
A default on the US federal government’s debt would be catastrophic for the US economy and financial markets and potentially trigger a global financial panic, threatening the US bond market’s status as the world’s safe haven and the US dollar’s status as the world’s reserve currency.
Biden on Wednesday blasted Republican-demanded spending cuts as “devastating,” making his case in a campaign-style speech to voters as representatives met in Washington on raising the government’s borrowing limit to avoid a potentially catastrophic US default.
The president is showing an increased willingness to discuss possible budget restraints, yet he insisted anew that any talks on that should occur without the risk of the federal government being unable to pay its bills.
As he spoke, negotiators from the White House and Congress met for two hours privately at the Capitol to discuss a path forward.
“America is the strongest economy in the world, but we should be cutting spending and lowering the deficit without a needless crisis,” Biden said on Wednesday.
His words were a challenge to House Speaker Kevin McCarthy, who on Tuesday met Biden at the White House, declaring afterward that sharp spending cuts were required for House Republicans to increase the debt limit and stave off the risk of default.
Biden laid into that GOP proposal on Wednesday in Valhalla, New York, saying spending cuts recently passed by the Republican House could hurt schools and the country’s “sacred” obligations to military veterans.
The face-off comes as the government is rapidly bumping up against its legal borrowing authority, meaning that it may not be able to pay its bills as early as the start of next month unless Congress agrees to lift the limit.
Wednesday’s events marked a preview of what the coming 18 months will look like for Biden as he performs his presidential duties while also trying to campaign in the 2024 election.
He went to a region represented by first-term Republican Representative Mike Lawler, whose district Biden won in 2020. Yet the president was gracious to the congressman, saying that Lawler is “the kind of Republican I was used to dealing with”.
With AP
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