Biden, Republicans hopeful on US debt ceiling deal

·3-min read

US President Joe Biden and top congressional Republican Kevin McCarthy edged closer to a deal to avoid a looming US debt default as the threat of an economic nightmare prompted Biden to cut short an Asia trip.

After an hour of talks, McCarthy, the speaker of the House of Representatives, told reporters the two sides remained far apart on an agreement to lift the debt ceiling.

But he said: "It is possible to get a deal by the end of the week. It's not that difficult to get to an agreement."

Democrats were not as positive about a quick time frame, but the White House called the meetings "productive and direct".

"There is still work to do," Biden later at a White House event honouring Jewish Americans. "We're on a path forward to make sure America does not default on its debt."

Biden said he was disappointed that Republicans will not consider ways to raise revenue. Raising taxes on the wealthy and companies to help pay for programs for other Americans is a key part of

Biden met for about an hour with McCarthy, Senate Majority Leader Chuck Schumer, Senate Republican leader Mitch McConnell and House Democratic leader Hakeem Jeffries after their aides met over the weekend to try to strike a deal.

Republicans have refused to vote to lift the debt ceiling past its $US31.3 trillion ($A47 trillion) limit unless Biden and his Democrats agree to spending cuts in the federal budget. However, McConnell said after the meeting, "We know we're not going to default."

The US government may default on some debts as early as June 1 unless Congress votes to lift the debt ceiling, and economists fear the country will slide into a recession.

Biden is "optimistic that there is a path to a responsible, bipartisan budget agreement if both sides negotiate in good faith and recognise that neither side will get everything it wants," the White House said.

Biden, who departs for Japan on Wednesday, plans to check in with leaders later this week by phone, and meet with them upon his return from overseas, the White House said.

The uncertainty around the debt ceiling prompted Biden to skip stops in Papua New Guinea and Australia after he attends a Group of Seven summit of the world's richest countries in Hiroshima, Japan.

"We've got a lot of work to do in a short amount of time," McCarthy told reporters, saying the Oval Office session had set the stage for future conversations.

Ahead of the meeting, sources said Biden and McCarthy's aides had discussed the requirements for two key programs that provide food and cash aid to families.

Expanding the work requirements has been a key demand of Republicans, who are also pushing for spending cuts in exchange for their votes to raise the debt limit. McCarthy told reporters that his party, which controls the House by a 222-213 margin, would only agree to a deal that cuts spending.

"We can raise the debt ceiling if we limit what we're going to spend in the future," McCarthy told reporters.