The Biden administration and Capitol Hill leaders are scrambling to avoid a first-ever government default that could arrive as soon as June 1, taking potential alternative strategies more seriously after months of deadlock over raising the country’s borrowing limit, the Wall Street Journal reported. Publicly, both Republicans and Democrats are still sticking to their demands as the clock ticks. GOP lawmakers are seeking to force cuts to federal spending in exchange for supporting raising the debt limit, while Democrats continue to call for a debt-limit increase without any other policy conditions. Privately, though, Biden administration officials and lawmakers have started to weigh potential alternatives to their negotiating position, including a short-term increase in the borrowing limit that would buy them time to find a compromise. Biden administration officials are also taking a fresh look at experimental ways the U.S. could potentially keep paying the government’s bills even if Congress doesn’t raise the debt limit. Treasury Secretary Janet Yellen’s warning this week that the U.S. could default as soon as June 1 jolted Washington, spurring officials to turn to a problem many had assumed wouldn’t become top of mind for several more months. A failure by the U.S. government to pay its bills on time risks broad financial and economic fallout. Biden has called top lawmakers to a meeting May 9 at the White House on the topic, which is set to be the first time he has met with House Speaker Kevin McCarthy (R-Calif.) to discuss spending and debt since February. Yellen shortened a planned trip to Japan next week because of the debt limit, according to people familiar with her plans.
