Federal debt limit a harmful selfish game

[Photo by Wang Xiaoying/China Daily]

This is an editorial from China Daily.

Having cut short a trip to Asia to resume talks on raising the US debt ceiling ahead of the US Treasury's June 1 deadline for Congress to authorize more borrowing, US President Joe Biden spoke with Republican House Speaker Kevin McCarthy by phone on his way back to the United States.

Biden told reporters that the phone call "went well" on his arrival at the White House on Sunday night, with McCarthy saying earlier in the day that it had been "productive".

But that remains to be seen, with the two continuing their negations on Monday.

Ahead of those talks, there was no sign of either side being prepared to give ground. The US government debt crisis has entered the 10-day countdown with some observers saying the two sides are playing a game of chicken.

Republicans are demanding harsh social welfare spending cuts to reduce the US deficit as the condition for their approval to raise the debt limit, while Biden has countered with an agreement to reduce some spending and raising new revenue by increasing taxes on the rich and corporations. Republicans have refused to accept any such tax increases.

If they fail to strike a debt deal this time, Washington will be unable to pay its bills. Treasury Secretary Janet Yellen said in an interview on Sunday that "My assessment is that the odds of reaching June 15th, while being able to pay all of our bills, is quite low".

Failure to do so would severely damage the US' global leadership as it would trigger shock waves worldwide and tarnish its image.

That Biden canceled his planned visits to Australia and Papua New Guinea for the negotiations with McCarthy shows the graveness of the issue.

Yet even with a US debt default within sight and the markets becoming increasingly jittery, neither side wants to give ground with next year's presidential election looming on the horizon.

No wonder when the House Republican leadership and the bipartisan Problem Solvers Caucus raised proposals to resolve the debt ceiling issue on April 20, the Peter G. Peterson Foundation said in a statement "this is a moment for leadership that puts our nation above party politics".

That proved not to be the moment.

For the two parties, their political wrangling has become a game that takes precedence over everything.

Damn the consequences.