President Joe Biden is scrapping planned stops in Australia and Papua New Guinea following his trip to Japan for the Group of Seven meeting to return for continuing negotiations with Republicans over raising the debt ceiling.
(Bloomberg) — President Joe Biden is scrapping planned stops in Australia and Papua New Guinea following his trip to Japan for the Group of Seven meeting to return for continuing negotiations with Republicans over raising the debt ceiling.
Biden, who departs for Japan on Wednesday, will now return to the US on Sunday following the conclusion of the G7 meetings, according to two people familiar with the plans. A White House official did not immediately return a request for comment, though National Security Council spokesman John Kirby said earlier in the day that the president was reevaluating the post-Japan part of his trip.
The cancellation comes after Republicans, including House Speaker Kevin McCarthy, heavily criticized the president for his upcoming travel plans as debt negotiations continued. Biden had scheduled meetings with Pacific island leaders in Port Moresby, before continuing to Sydney and Canberra for the Quad summit with leaders of Australia, Japan, and India. Biden will now meet the Quad leaders in Tokyo, Kirby said.
The decision threatens to undermine efforts by the administration to strengthen ties in the Pacific, in a bid to counter Chinese influence. But Kirby said the international stakes emphasized the importance of the debt ceiling issue.
“We understand how important it is that the United States not only say we are, but prove we are a reliable, stable, strong partner,” Kirby said.
Failure to reach a deal could lead the US to breach its debt ceiling, triggering a default that would spark a market selloff, throw maybe millions out of work and raise borrowing costs for the government and consumers alike.
Wall Street showed fresh anxiety Tuesday about Washington’s ability to raise the debt limit and prevent a historic default with both stocks and bonds falling. Yields rose across the US curve, with the rate on 30-year notes climbing to around 3.9% — the highest since the turmoil affecting regional banks that erupted in early March.
Biden is meeting Tuesday with congressional leaders on the heels of staff-level talks throughout the weekend. Biden has said talks have been constructive while McCarthy has said they haven’t yielded any results. McCarthy had called on Biden to scrap or curtail his trip.
Read more: McCarthy Digs In on Republican Demands Ahead of Biden Debt Talks
The sides are negotiating a debt-ceiling deal, with McCarthy demanding spending cuts as a condition of raising the limit. Biden wants a clean suspension or hike of the limit to allow talks to continue without risking default, an overture the speaker has so far declined.
Markets are already agitating over the potential of a debt ceiling breach and default. A breach would trigger a market sell-off, potentially cost millions of jobs and raise borrowing costs for the US government and individual Americans alike.
Corporate heads including the chief executive officers of Goldman Sachs Group Inc., Pfizer Inc. and Nasdaq Inc. called on both sides Tuesday to take action to avoid a default.
Earlier: Goldman CEO, Top US Executives Urge Quick Action on Debt Limit
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