US Republicans pause debt crisis talks, weeks before potential default

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© Kevin Lamarque, Reuters

Republicans have paused crunch US debt talks less than two weeks before a possible catastrophic default, House Speaker Kevin McCarthy said Friday, citing lack of movement from Democrats.

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," the Republican leader told reporters in Congress, adding, "we can't be spending any more money next year."

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A default could ignite a firestorm in global markets, with investors nervously watching as the talks have unfolded.

US stock indexes, which had been trending higher, changed course later Friday on the news.

Republicans continue to insist Biden must sign up to spending cuts in exchange for their support to raise the debt ceiling, ignoring repeated Democratic calls for a "clean" increase of the borrowing limit with no strings attached.

Democrats have framed the talks as an opportunity to discuss the upcoming budget ahead of June 1, when the Treasury predicts the United States could start defaulting on its debts, with dire economic consequences.

"Their plan puts politics over people. We MUST pass a clean debt ceiling NOW."


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