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    Biden ‘confident’ of reaching deal with McCarthy to avoid US debt default

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    Joe Biden and the Republican speaker of the US House, Kevin McCarthy, said on Wednesday they thought a deal to avoid a US debt default was in reach.Speaking at the White House, Biden said: “I’m confident that we’ll get the agreement on the budget, that America will not default.“We’re going to come together because there’s no alternative way to do the right thing for the country. We have to move on.”On Tuesday, Biden and McCarthy met for an hour at the White House, a meeting the president called productive.Biden, who has faced some criticism for his handling of the issue, is due to travel to the G7 summit in Japan but has cut the trip short to pursue a debt ceiling deal. Plans to visit Papua New Guinea and Australia were postponed.On Wednesday, the president said: “I’ll be in constant contact with my team while I’m at the G7 and be in close touch with speaker McCarthy and other leaders as well.“What I have done in anticipation that we won’t get it all done till I get back is, I’ve cut my trip short in order to be [here] for the final negotiations and sign the deal with the majority leader.”Biden said he expected to return to Washington on Sunday and hold a press conference. Biden’s press secretary, Karine Jean-Pierre, told CNN that Biden’s decision to cut short his Asia trip sent “the message that … America does not default on its debt”.Also on Wednesday, McCarthy spoke to CNBC.He said: “I think at the end of the day we do not have a debt default. The thing I’m confident about is now we have a structure to find a way to come to a conclusion. The timeline is very tight. But we’re going to make sure we’re in the room and get this done.”A failure to honour US debts could have catastrophic impacts on the US and world economies. The US treasury secretary, Janet Yellen, has indicated that without agreement, default could come as early as 1 June.Republicans want sharp spending cuts. Democrats say Republicans should agree to a “clean” debt bill, the sort they repeatedly passed under Donald Trump. But Biden also seemed ready to make some compromises, including some work requirements on federal programs, though not on healthcare programs.Financial markets appeared to be buoyed as McCarthy joined the Republican Senate leader, Mitch McConnell, and the White House in pledging the US would not fail to pay its debt obligations. US stock indexes opened higher on Wednesday.Biden was widely reported to have agreed to a key demand from McCarthy: that negotiations be carried out by a small group of aides, removing, for now, Democratic leaders in the House and Senate.Politico said Biden was now represented by the White House counselor Steve Richetti, budget director Shalanda Young and legislative affairs director Louisa Terrell. Garret Graves, a Louisiana Republican and McCarthy ally, was leading the Republican team.McCarthy, who controls the House by just five seats, is widely seen to be at the mercy of the far right of the Republican caucus. But according to Politico, Graves “isn’t a bomb-thrower or grandstander, and Democrats told us they’ve seen him as a steady hand in other bipartisan policy negotiations”.Politico reported that the new negotiators “huddled on Capitol Hill last night to start negotiations, reflecting the time crunch as the clock ticks toward a possible 1 June default”. Punchbowl News said “full-scale negotiations [were] set to kick off” on Wednesday.It will not be a simple process. The negotiators, Punchbowl said, had “a very difficult task ahead of them. They need to find a deal that can pass Congress in the next 15 days. To do that, they’ll have to come up with a framework over the next few days.“This is a massive lift that will require deft negotiating, cooperation from all sides and incredible flexibility on behalf of our national political leadership. Basically everything that Congress hasn’t done at all this year and traditionally isn’t very good at.”House Republicans are demanding $4.8tn in spending cuts, mostly to Democratic priorities including welfare and environment spending. Demonstrating the political vice in which Biden finds himself, progressives have warned him not to give in.“It’s really important we don’t give ground,” Pramila Jayapal, chair of the Congressional Progressive Caucus, told Axios. “We have made it clear … that if they give on these core Democratic values, there will be a huge backlash.”Jean-Pierre told CNN that Republicans “want to cut healthcare, they want to increase poverty, and it’s not going to save much money”.Hakeem Jeffries, the Democratic House minority leader, also spoke to CNBC.“It creates uncertainty that’s bad for the American people. It’s bad for the economy. That’s bad for business,” he said. “And so our view has consistently been that any resolution of this matter has to be at least two years in nature. And that was a position that was once again made clear in the meeting yesterday.”Punchbowl said: “If Democrats want to hike the debt limit until 2025, McCarthy is going to demand a lot in return.”Jeffries insisted: “Our view is that if we’re going to have a thoughtful conversation about deficit reduction, that conversation can’t simply be one-sided, based on the rightwing ideological perspective of a handful of extreme Maga Republicans.“That’s not how you make public policy.” More

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      The Guardian view on Biden’s risky gamble: betting on lowering oil prices | Editorial

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      The Guardian view on Biden’s risky gamble: betting on lowering oil pricesEditorialThe climate agenda risks being derailed by energy market disruptions caused by Russia’s war in Ukraine Joe Biden’s trip to Saudi Arabia this month highlights the paradox of American power. The US has the economic heft to punish an opponent – but not enough to alter the behaviour of a determined adversary. Sanctions will see Russia’s economy contract by 9% next year. But Washington needs more nations to join its camp to halt Moscow’s brutal invasion of Ukraine. Mr Biden has been forced to prioritise war objectives over ethics in meeting Crown Prince Mohammed bin Salman, who the CIA says ordered the barbaric murder of the prominent journalist Jamal Khashoggi.The havoc that Russia’s war has caused on the world’s energy markets is contributing to an economic crisis that is playing into the hands of Mr Biden’s domestic opponents. This highlights the west’s failure to confront the climate emergency with a less carbon-intensive economic model. The green agenda risks being derailed by sky-high hydrocarbon prices. This scenario could have been averted if western nations had accelerated their net zero agendas by driving down energy demand – the lack of UK home insulation is one glaring failure – and spending on renewables to achieve energy security. Instead, this week the G7 watered down pledges to halt fossil fuel investment over fears of winter energy shortages as Moscow squeezes supplies.Boycotts and bans against Russia, even as they take a toll on the global economy, will cause ordinary Russians hardship. But this has not moved Vladimir Putin. Soaring crude prices fuel Moscow’s war machine. A price cap on Russia’s petroleum exports might choke off the cash. But a concern is that China and India will buy Mr Putin’s oil at a price that still lets the Kremlin profit. Clever technical solutions mask hard choices. Sanctions drive up energy prices for consumers unless there are alternative supplies available. Right now, to bring down oil prices means producing more planet-destroying energy. That requires US engagement with Saudi Arabia and the United Arab Emirates, both of which bear responsibility for the disastrous Yemen war. Washington might have to woo Venezuela and Iran, nations which will play Moscow off against the west.The US is pursuing a three-pronged strategy: increasing pressure on Russia; getting more oil into markets to bring prices down; and allowing central banks to raise interest rates to levels that look as if they might cause a recession. The latter is designed to signal to oil producers that energy prices will collapse. The painful recessions of the 1970s and early 1980s played a part in bringing down oil prices after energy shocks – and contributed to the Soviet Union’s disintegration. But this took 15 years. Mr Putin’s Russia may not be as powerful as its forerunner. It might be more brittle than the Soviet Union. But there are few signs of imminent collapse.As the west seeks to reduce its reliance on Russian hydrocarbons, there seems to be a global “gold rush” for new fossil fuel projects defended as temporary supply measures. The risk, with the US as the largest hydrocarbon producer, is that the world becomes locked into an irreversible climate catastrophe. Europe might become as reliant on US gas as it once was on Russian gas. Donald Trump proved America could be an unreliable ally. Rightwing supreme court justices have hobbled Mr Biden’s power to limit harmful emissions. Meanwhile, China has emerged as a world leader in renewable energy as well as the metals on which it depends. Mr Biden had wanted to transition the US away from oil. Yet during his time in office the sector’s market value has doubled because prices have risen. Jarringly, as the climate emergency grows ever more urgent, fossil fuel appears the pivot on which the war in Ukraine will turn.TopicsUkraineOpinionClimate crisisJoe BidenUS politicsSaudi ArabiaMohammed bin SalmanOileditorialsReuse this content More

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      Joe Biden’s foreign foray is all about shoring up democracy – in the US | Henry Farrell

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      During his first trip abroad as US president last week, Joe Biden kept telling Europe that “the US is back”. Before the G7 meeting, Biden signed a new Atlantic charter with Boris Johnson that agreed to protect democracy and open societies. After Cornwall, he went on to more meetings in Brussels with the European Union, as well as a Nato summit and a head to head with Vladimir Putin in Geneva. Past presidents have viewed the EU as an irrelevant bureaucracy or a sinister threat. Biden described it as an “incredibly strong and vibrant entity”. In his press conference with Emmanuel Macron, Biden seemed to promise that the US was returning to its normal role in international politics. After Donald Trump, some nostalgic politicians might even hope for a reinvigoration of the so-called rules-based liberal order which has purportedly prevailed since the second world war.Anyone with such hopes is bound to be disappointed. Despite his rhetoric, Biden isn’t really interested in a return to the status quo, or in reuniting the old band of transatlanticists to tour their greatest hits. The old transatlantic relationship reflected America’s needs after the 1939-45 war. The US didn’t create Nato or shovel money at shattered European economies out of disinterested generosity, but because it wanted to strengthen allies to better face shared threats.Now, the US’s needs have changed, and so will its actions. Biden genuinely and openly fears that American democracy is in danger. Threats come from outside, because China offers an attractive alternative model, with authoritarianism able to provide reasonable prosperity to its population. But more perniciously, American democracy is under threat from inside. Trump did not accept his election defeat in November and egged on his supporters to attack the US Capitol on 6 January to overturn the result. At the same time, Republicans are using their control of state legislatures to bring through a plethora of laws aimed at making it harder to vote and so cement their own rule.Biden is rather less keen to discuss the fact that he is relatively powerless to address those internal threats. Thin Democratic majorities in both the Senate and House of Representatives, combined with united Republican opposition and the presence of the Senate filibuster, make it nearly impossible to get any legislation passed.On external matters though, one of the few major areas of bipartisan agreement is distrust of China. This is why the administration and its allies have been able to pass legislation aimed at boosting American research projects, which they can justify as helping the US to compete with China. This shared outlook allows Biden more elbow room for a robust approach to China – and besides, it is much easier for him to act abroad unilaterally than to work on domestic matters through Congress. US presidents have very wide leeway to make foreign policy so long as they don’t try to sign binding treaties.The result is an approach that combines competition with China, efforts to protect global democracy and measures ultimately intended to shore up some of the gaping vulnerabilities in US domestic politics. Other presidents wanted to spread democracy around the world, whether through free-trade liberalism or through force. The new administration wants to bring democracy back home.This focus will remake the transatlantic relationship. The guiding mantra of his international team is that they are making “foreign policy for the middle class”. This phrase isn’t nearly as bland as it seems. It implies that the traditional approach to American foreign policy of years past – pressing for free-trade agreements to spread international liberalism – actually hurt ordinary Americans and made them more likely to vote for Trump, with all the dangers for democracy that entailed.The Biden administration is likely to be far less interested in free-trade agreements than its pre-Trump predecessors, especially when they are costly for American industry. It’s notable that the new Atlantic charter with Britain doesn’t have any reference to the World Trade Organization, and that it talks about “open and fair trade” rather than simply “open trade”. Meanwhile, the president wants to use economic measures such as rebuilding supply chains to minimise dependence on autocracies and prevent China’s access to key technologies. But those efforts are likely to sit awkwardly with WTO rules.Despite Biden’s outward friendliness this poses a big challenge to the EU, which has in some ways been more committed to rules-based multilateral trade than the US. It may also present difficulties for Johnson’s post-Brexit Britain. A world of existing, stable multilateral rules is much more comfortable for a mid-sized power than a new free-for-all. Economies such as Germany, which have depended heavily on the Chinese market, are also going to face some difficult choices.Biden’s new enthusiasm for more strict global tax rules also provides some problems for international partners. Again, the reasons are largely domestic: the policy echoes Bernie Sanders’ argument, leading from the left of the Democratic party, that tax havens and easy, anonymous money-flows damage democracy by enabling corruption and kleptocracy. That then becomes awkward for the UK, which has long turned a blind eye to inflows of dirty money and whose overseas territories are among the world’s leading tax havens. It’s also a problem for EU tax havens such as the Republic of Ireland and the Netherlands, and for islands like Cyprus and Malta with banking systems that cater for Russian and Eurasian oligarchs.While Biden proclaims that America is back on the world stage, truly he is looking homewards, preoccupied with a broken domestic political system and how to fix it. By tackling those vexed international issues of China, trade and tax, Biden hopes in turn to help US democracy to find its way again. If they really want to remake the transatlantic relationship, the UK and Europe are going to have to work together with an administration with a very different understanding of American interests than its predecessors. More

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      Biden warns Russia over cyber-attacks, says Putin doesn't want cold war – video

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      Joe Biden warned Russian president Vladimir Putin that the US has significant cyber capability as he looked to pressure his counterpart over cyber-attacks. The US leader says Putin wasn’t seeking to intensify confrontation with the west after the two held “good and positive” talks. “I think that the last thing he wants now is a Cold War,” Biden said

      Biden warns US will hit back if Russia continues with cyber strikes More

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      Joe Biden’s mission at the G7 summit: to recruit allies for the next cold war | Rafael Behr

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      Joe Biden crosses the Atlantic this week on a tide of goodwill. After four years of Donald Trump, European leaders are grateful for the mere fact of a US president who believes in democracy and understands diplomacy.Trump had no concept of historical alliance, strategic partnership or mutual interest. He saw multilateral institutions as conspiracies against US power, which he could not distinguish from his own ego. He heard European talk of a rules-based international order as the contemptible bleating of weakling nations.Biden’s stated purpose is bolstering that order. In an article published in the Washington Post on the eve of his trip, the president talks about “renewed” and “unwavering” commitment to a transatlantic relationship based on “shared democratic values”.The itinerary starts in Cornwall with a gathering of G7 leaders. Then comes Brussels for a Nato summit, plus meetings with presidents of the European Council and Commission. Biden intends to orchestrate a surge of western solidarity as mood music ahead of a final stop in Geneva, where he sits down with Vladimir Putin. On that front, a stable chilling of relations will count as progress after the downright weirdness of Trump’s willing bamboozlement by the Kremlin strongman.A re-enactment of cold war choreography would suit Putin by flattering his pretence that Russia is still a superpower. In reality, Washington sees Moscow as a declining force that compensates for its shrunken influence by lashing out where it can, causing mischief and sowing discord. Putin is seen as an irritant, not a rival.That is in marked contrast to the view of China – an actual superpower and the eastern pole that Biden has in mind when he talks about reviving an alliance of western democracies. In that respect, the repudiation of Trumpian wrecking-ball rhetoric can be misleading. It sounds to European ears as if the new White House administration is hoping to set the clock back to a calmer, less combative epoch. In reality, Biden is coming to tell Europe to get its act together in the coming race for global supremacy with Beijing.By Europe, in this context, the president also means Britain. Boris Johnson might imagine himself a world leader of continental stature, but a US president is not required to indulge that fantasy.Biden takes a dim view of Brexit, seeing it as a pointless sabotage of European unity. The White House preferred Britain as a pro-US voice wielding influence inside the EU. Since that function is lost, Brexit’s only utility is in making it easier for the UK to embrace economic and strategic vassalage to the US. That means toeing a hawkish line on China.European nations should not really have to pause for long if the choice is alignment with Washington or Beijing. It is easy to muster resentment of US global swagger and point out hypocrisies in its claim to be a beacon of political freedom. But the alternative is an expansionist totalitarian state that militates against democracy and is currently engaged in a genocide against the Uyghurs.If China were a poorer country, Biden’s mission would be easier. But the economic gap between the established superpower and the challenger is closing. Per capita, Americans are still much better off, but China could overtake the US in gross domestic product by the end of this decade. With that heft comes world-leading technological capability with crossover military application that keeps the Pentagon up at night.During the cold war, the Kremlin maintained a credible military rivalry with the west but was not an economic competitor for long. The collapse of the Soviet model seemed to prove that political freedom and prosperity came as a package. There could be no enterprise without markets, no markets without fair rules, and no enforceable rules without democracy. The Chinese Communist party’s hybrid model of authoritarian capitalism appears to have disproved that theory.When the G7 was conceived in the 1970s, its combined membership – the US, Canada, Britain, France, Germany, Italy and Japan – comfortably represented a commanding share of global wealth. There was a natural association of liberal democratic institutions and economic success. Today, those seven nations’ combined GDP is down to 40% of the world total. The west is still rich, but it is no longer the world’s envied super league.Chinese money gives Europe commercial incentives that compete with its high-minded rhetoric on democratic values. China is Germany’s biggest export market. Smaller EU members have welcomed Chinese investment in infrastructure and businesses, although qualms are steadily growing about built-in political strings and security trapdoors. A huge Brussels-Beijing trade deal, signed last year (much to Washington’s dismay), is currently frozen as part of a tit-for-tat dispute over European criticism of Chinese human rights abuses.But EU governments simply don’t feel US levels of urgency to contain China. Geography is a factor – the US has a Pacific coast and strategic commitments to Taiwan, where Britain and France, for all their naval bravado, are little more than spectators. There is a conceptual difference too. As one diplomat puts it, Europe doesn’t like what China does, but the US doesn’t like what China is. The idea of the US being superseded as the paramount global power within the current century is existentially appalling for Washington.The Trump phenomenon compounds that anxiety for the current White House administration. It was a near-death experience for America’s constitutional order; an intimation of mortality for a political and economic model that looked insuperable at the dawn of the 21st century. The US president urges fellow western leaders to show strength in solidarity because the prospect of division, decline and the discrediting of democracy is more real than at any time in his five-decade Washington career.During that time, Biden has succeeded by patience, diplomacy and soft-spoken understatement. That style earns him a grateful audience in Europe, but the president’s manners should not be mistaken for mildness of purpose; the modest style is deployed in service of a tough message. He is not flying across the Atlantic to wallow in nostalgia for the alliances that won the first cold war. He is drumming up recruits for the second one. More

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      Biden trumpets democracy abroad in Post op-ed – as threats spread at home

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      Joe Biden will use his visit to Europe this week to “rally the world’s democracies” in a reset of US foreign policy after four turbulent years under Donald Trump – all while threats to American democracy, stoked by Trump, proliferate at home.The president’s plan for the trip was set out in a column for the Washington Post on Saturday night, as Trump spoke to Republicans in North Carolina.Previewing meetings with “many of our closest democratic partners” and Vladimir Putin, Biden promised to “demonstrate the capacity of democracies to both meet the challenges and deter the threats of this new age”.Critics may point out that the president would do well to face up to attacks on democracy at home. He has put Vice-President Kamala Harris in charge of the matter but there are many fronts to the battle.In the states, Republicans have passed laws to restrict ballot access and to make it possible to overturn election results.On the stump, Trump continues to peddle his lie that Biden’s victory in November was the result of fraud. In Greenville on Saturday, the former president called his defeat “the crime of the century”.In Washington last month, Republicans in the Senate blocked a bipartisan commission to investigate the attack on the US Capitol on 6 January, by supporters Trump told to “fight like hell” in his cause.In Biden’s own party, centrist senators stand in the way of voting rights protections.In his column for the Post, Biden tied another domestic priority – infrastructure spending, currently tied up in seemingly doomed negotiations with Republicans – to a chief foreign policy aim.“Just as it does at home,” he wrote, “honing the ability of democracies to compete and protecting our people against unforeseen threats requires us to invest in infrastructure. The world’s major democracies will be offering a high-standard alternative to China for upgrading physical, digital and health infrastructure that is more resilient and supports global development.”In North Carolina, Trump said China should pay the US and the world $10tn in reparations for its handling of the coronavirus outbreak, while nations should cancel debt to Beijing.Biden touted domestic successes – progress against the coronavirus and the passage of his relief and stimulus package (without a single Republican vote) – and said: “The United States must lead the world from a position of strength.”He saluted the announcement on Saturday by G7 finance ministers of a global minimum corporate tax rate. Further distancing himself from Trump, who withdrew from the Paris climate deal, he said: “We have an opportunity to deliver ambitious progress that curbs the climate crisis and creates jobs by driving a global clean-energy transition.”In office, Trump attacked Nato. Biden saluted the “shared democratic values” of “the most successful alliance in world history. In Brussels, at the Nato summit, I will affirm the United States’ unwavering commitment to … ensuring our alliance is strong in the face of every challenge, including threats like cyberattacks on our critical infrastructure.”Amid proliferating such attacks, he said, it was important that “when I meet with Vladimir Putin in Geneva, it will be after high-level discussions with friends, partners and allies who see the world through the same lens as the United States”.Trump famously caused consternation among the US press corps in Helsinki in 2018, meeting Putin without aides and seeming cowed in his presence.Biden said the US and its allies were “standing united to address Russia’s challenges to European security … and there will be no doubt about the resolve of the United States to defend our democratic values, which we cannot separate from our interests.”Some have asked what Biden hopes to gain from meeting Putin – former Trump national security adviser John Bolton told the Guardian this week, “You meet when you have a strategy in place of how to deal with Russia and I don’t think he has one.”In the Post, Biden heralded his extension of the New Start nuclear arms treaty and responses to cyberattacks.“I will again underscore the commitment of the United States, Europe and like-minded democracies to stand up for human rights and dignity,” he wrote.“This is a defining question of our time: can democracies come together to deliver real results for our people in a rapidly changing world? Will the democratic alliances and institutions that shaped so much of the last century prove their capacity against modern-day threats and adversaries?“I believe the answer is yes. And this week in Europe, we have the chance to prove it.” More