Disagreements remain deep between Democrats and Republicans over the U.S. federal borrowing limit, Treasury Secretary Janet Yellen said Monday, insisting on the need to find “compromise” ahead of a meeting today at the White House between President Joe Biden and the Republican leaders in Congress.

“Clearly, the distance between the position of the president and that of the Republicans is huge,” stressed Mr. Biden’s Secretary of the Economy and Finance in her statements on the CNBC television network.

Despite the disagreements, however, “we have to have discussions and compromises regarding fiscal policy, total spending and what this spending serves,” he continued.

This should be done in the context of “smooth fiscal processes and the president hopes that there will be a process of dialogue and compromises on these issues,” Ms. Yellen added.

He emphasized, however, that Mr. Biden is “not willing” to make compromises “with a gun to his temple, even less (…) to the temple of the American people”, referring to the pressure of the Republicans, who demand drastic cuts in public spending.

The US president will welcome the leaders of the Democrats and the Republicans to the White House today in order to reach an agreement to increase the limit of the federal government’s debt and thus avoid the catastrophic and unprecedented scenario of the US default.

They are House Speaker Kevin McCarthy, Republican; House Democratic Leader Hakeem Jeffries; Senate Majority Leader Chuck Schumer; and House Republican Leader Mitch McConnell.

The limit is set by law and cannot be increased except by a vote of Congress. If there isn’t one, the country will no longer be able to service its debt obligations, which Mrs. Yellen has warned could happen as early as June 1.

The House of Representatives, where the majority of seats are held by Republicans, adopted a bill in late April that provides for drastic cuts in public spending in exchange for raising the borrowing limit.

There is absolutely no chance, however, that the text will pass as it is in the Senate, where the Democrats have a majority, and President Biden insists on saying that he refuses to negotiate what Mrs. Yellen calls the “draconian” cuts demanded by the Republicans.

“If Congress does not raise the debt limit, the president will be called upon to make decisions about the use of available funds. There are various options, but there is no good option (…) beyond increasing the limit,” insisted his minister.

The prospect of no hike would cause “huge damage to American households” and “chaos” in financial markets, the minister warned, noting that political games over the debt limit could hurt the country’s creditworthiness and the dollar, as the world’s reserve currency. . That is “a real concern,” insisted Mrs. Yellen, the former head of the US central bank.