Biden is optimistic on reaching an agreement: The debt ceiling crisis threatens with a catastrophe

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US President Joe Biden and a Republicans said on Friday they were working on a deal on raising the $31.4 trillion US government debt ceiling after the Treasury Department warned a June 5 default loomed without action procedure.

The two sides have been negotiating for weeks an agreement to raise the federal government’s borrowing limit, as Republicans are also pressing for severe spending cuts.

Without a deal, the United States could face a default with catastrophic repercussions.

“Things are looking good… I am optimistic,” Biden told reporters.

Republican Representative Patrick McHenry said he agreed with Biden’s comments, but cautioned that negotiations far from over.

The two made their comments separately shortly after US Treasury Secretary Janet Yellen said the government would be unable to find the money needed to pay its bills by June 5.

Yellen had previously said that deadline could come as early as June 1.

Negotiators are discussing a deal that would raise the limit by two years, but remain at odds over whether to tighten labor requirements for some anti-poverty programs.

CNN reported that Republican House Speaker Kevin McCarthy left the Capitol on Friday after a conference call in which he told one of his top Republican aides that no deal had been reached.

Any deal must win approval in the Republican-controlled House of Representatives and the Democratic-led Senate before Biden signs it into law, a process that could take more than a week.

A US official said negotiators had reached a tentative agreement that would limit spending on several government programs next year.

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