The White House said on Tuesday (May 16) that President Joe Biden may skip a visit to Australia on an upcoming Asia trip because of the US debt ceiling crisis.
The White House national security spokesperson John Kirby said that Biden would depart for Japan on Wednesday as scheduled but a subsequent stop in Australia is being “reevaluated”.
“We’re working though, thinking through, the rest of the trip right now,” Kirby said, further clarifying that “there’s not been a cancellation as yet, but that could happen. We’ll see where it goes…”
He noted that Biden would meet Indian Prime Minister Narendra Modi and Australia’s Anthony Albanese at the G7 anyway in Hiroshima, Japan.
Kirby didn’t confirm anything, but the news agency AFP reported citing two people familiar with Biden’s plans that the president will cut short the major trip this week.
The report mentioned that he will return on Sunday to Washington for high-stakes negotiations with Republicans to avert a potentially catastrophic debt default.
According to the individuals who were not authorised to talk publicly, Biden has cancelled scheduled stops in Australia and Papua New Guinea but will still attend the upcoming G7 summit in Japan.
WATCH | US debt limit deadlock spooks investors while Joe Biden is hopeful of a deal on debt ceiling
US debt ceiling crisis
Biden and Republican leaders have started high-stakes talks Tuesday aimed at countering a potentially catastrophic US debt default, but Treasury Secretary Janet Yellen had warned ahead of the talks that the US could default on its debts as early as June 1.
The Treasury has warned of “catastrophic” implications if the nation runs out of funds to pay its debts, which would leave it unable to pay government employees and trigger a likely rise in interest rates, which would have a significant impact on businesses and mortgage holders.
In a letter to the Republican speaker of the House of Representatives, Kevin McCarthy, she said, “We still estimate Treasury will likely no longer be able to satisfy all of the government’s obligations if Congress has not acted to raise or suspend the debt limit by early June, and potentially as early as June 1.”
Both, Biden and McCarthy, have blamed the other side for the failure to make progress in the first round of discussions last week.
McCarthy told reporters at the US Capitol on Tuesday, “We’ve got to solve the problem. I just want to get in the room and work out the challenge here and come to an agreement.”
But Biden accused the Republican Party of holding the economy hostage. He said, “America cannot default on its debt. If we were to do that it would be catastrophic. It would be devastating for America and quite frankly the whole world.”
(With inputs from agencies)
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