HIROSHIMA: The sight of a tired-looking top White House domestic policy adviser in a Hiroshima hotel said it all: President Joe Biden may be on the other side of the world but his political fight back home over the debt ceiling has followed him. Bruce Reed, spotted in a tracksuit having a late breakfast at the luxury hotel where Biden was staying during the G7 summit, is the White House deputy chief of staff with a focus on issues inside the United States.
Instead, for the last two days he has trailed the 80-year-old Democratic president around this southern Japanese city, “updating POTUS on the status of the talks”, as a senior official put it.
Meanwhile, talks to avoid a US debt default were on a knife edge Saturday as President Joe Biden warned he would not accept “extreme” Republican demands but said he remained optimistic. “I still believe we’ll be able to avoid a default and we’ll get something decent done,” he told reporters at the G7 summit in Hiroshima, Japan. With the Treasury Department warning that the US government could run out of money as early as June 1 — triggering massive economic disruption in the world’s biggest economy and likely around the globe—the political battle in Washington has see-sawed without any clear sign of resolution. Republicans, who control the House of Representatives, are demanding steep budget cuts as a price for allowing an extension of the government’s borrowing authority. The White House is seeking to whittle down Republican demands, while arguing that the traditionally uncontroversial annual debt ceiling increase is being weaponized for political gain.
The threat of a US default was raised a notch on Friday after a “pause” in debt ceiling talks between the White House and the Republican opposition as the two sides wrangle with deep disagreements. Negotiators for President Joe Biden have been locked in talks with Republicans as they seek a deal to raise the US borrowing limit and allow the world’s largest economy to avoid defaulting on its debt repayments.
“We’ve got to pause,” Republican leader Kevin McCarthy told reporters in Congress, adding, “we can’t be spending any more money next year.” A default could ignite a firestorm in global markets, with investors nervously watching as the talks unfolded.
Those “talks”—the White House demanding that the annual extension of the government’s borrowing authority proceed in order to avoid a US default and Republicans demanding Democrats first agree to slash spending—were something everyone at the G7 wanted updates on. “It is definitely a subject of interest here at the G7,” National Security Advisor Jake Sullivan told reporters on Saturday, exuding his customary intense calm.
Sullivan insisted that the debt talks had not been “generating alarm or a kind of vibration in the room” at the summit. And Press Secretary Karine Jean-Pierre insisted that it’s not a “hair-on-fire type of situation”. Yet those reassurances belie the White House’s own apocalyptic warnings.
“Republicans are taking the economy hostage and pushing us to the brink of default, which could cost millions of jobs and tip the country into recession after two years of steady job and wage growth,” Biden communications director Ben LaBolt said Saturday.
Biden walks fine line
Biden has spent the entire summit trying to walk that same fine line. On the one hand, he wants the world to know that everything will be OK. On the other, he’s signaling that he’s extremely worried.
The crisis prompted Biden to cancel half of his planned Asia trip, thereby allowing him to get on Air Force One and start the return trip to Washington on Sunday. This meant scrapping what would have been a historic first trip by a sitting US president to the remote island nation of Papua New Guinea, as well as a heavyweight diplomatic stop for a regional Quad group meeting in Australia.
Biden also skipped much of the G7 dinner on an idyllic island near Hiroshima on Friday. The White House said Biden was going back to his hotel to check with negotiators in Washington, where it was morning. He’d already touched base by secure video link as the team was finishing up the previous evening and he was on the phone with them again Saturday. “He’s being kept up to date daily… multiple times a day,” Jean-Pierre said.—AFP