House Speaker Kevin McCarthy, a Republican, told reporters there was “no new movement” in just one hour of congressional leaders meeting with Democratic US President Joe Biden on raising the cap. federal government borrowing on Tuesday, three weeks before the world’s largest economy faces the “catastrophic” unprecedented scenario of default.

The head of the Democrats in the Senate, Chuck Schumer, accused Mr. McCarthy, leaving the White House, that he refused to remove from the table the possibility of not increasing the debt limit, that he continues to hold the country “hostage”, demanding deep cuts in public spending to get his faction to agree to what until a few years ago was merely a formality.

The parties will meet again on Friday to exchange views on the thorny issue, according to Mr McCarthy.

Democrats and Republicans seem unable to agree on raising the borrowing limit, a congressional decision absolutely necessary for the federal government to be able to pay its bills, its workers and its creditors.

This is an American peculiarity: in no other developed economy is there such a procedure for fiscal affairs. The famous “threshold” of 31.4 trillion. dollars has already been covered and the federal government is handling the problem with temporary measures.

Referring to the meeting, Mr. McCarthy complained that the president did not agree to talks until time was running out. “This is not the way to govern,” he judged, accusing the head of state of not having an “alternative plan.”

He added that he doesn’t think any short-term compromise will resolve the issue, insisting on spending cuts and deficit reduction.

Mitch McConnell, the Republican leader in the Senate, upped the ante, telling reporters that there would be no increase in the borrowing limit without cuts in government spending.

President Biden, who at this stage says there will be no negotiation on linking the cap increase to public spending, is demanding it be done without conditions, he was expected to speak Tuesday night [σ.σ. τις πρώτες πρωινές ώρες σήμερα ώρα Ελλάδας].

Economists have warned that a default would plunge the US into recession, destroy millions of jobs and destabilize the global financial system, which is critically dependent on US Treasuries and the dollar. Many investors are feverishly preparing for this risk.

In the past, conflicts between Democrats and Republicans over the debt limit usually ended with some hasty compromise and avoiding a default. In 2011, the battle had led to what analysts called a “historic” downgrade of the US government’s credit rating by rating agencies. Veterans of that showdown warn that the current one is more dangerous because the gap between the two factions, Democrats and Republicans, has widened.

The meeting between Mr. Biden and Mr. McCarthy was the first since February.

Earlier yesterday, both Mr. McCarthy and the US presidency seemed to be closing the door on the scenario of a short-term solution, that is – as discussed in Capitol Hill in recent days – to raise the debt limit until September in order to negotiate in the mid-term .

Mr. Biden would agree to discuss public spending, but separately, not tied to the borrowing limit, his staff said.

Investors and the business community are closely watching the developments and are demanding that the parties provide an “immediate” solution to the problem, as the American Chamber of Commerce, the largest US business association, put it.

In fact, President Biden’s schedule and planned House and Senate shutdowns mean the parties can meet just seven days before June 1.

Treasury Secretary Janet Yellen has warned there is no “good option” short of raising the debt limit, dealing a heavy blow to the US economy and the dollar as the world’s reserve currency.

The White House is discussing the possibility of Mr. Biden unilaterally raising the debt limit, invoking the 14th amendment of the US Constitution. But the 80-year-old Democrat, who recently announced he will seek re-election in 2024, said last week that he is “not there yet.”

If he were to proceed with this measure, it is considered certain that he would face legal action from the other side.