US debt ceiling talks grind on as China warns of spillover

Debt ceiling negotiators for President Joe Biden and House Speaker Kevin McCarthy have traded more budget-cutting ideas at the Capitol, but Republicans warned of a "lack of urgency" at the White House to resolve the standoff in time to avert a potentially chaotic federal default.

With barely a week to go before a deadline as soon as June 1, the Democratic president and the Republican speaker were staring down a financial crisis.

Failure to strike a deal would be unprecedented, and certain to throw US financial markets into turmoil, inflicting economic pain at home and abroad. Markets lowered on Tuesday with no deal in sight.

"We’re not there yet," McCarthy said at the Capitol, reiterating he won’t bring any bill forward “that doesn’t spend less than we spent this year."

Behind closed doors, McCarthy urged his slim House Republican majority to "just stick together" despite their own factions as he negotiates the strongest deal possible for conservatives, said lawmakers exiting the private session.

He told reporters the teams are eyeing "creative" ways of rolling back spending that all sides can accept. "I believe we can still get there — and get there before June 1," McCarthy said.

Dragging into a third week, the negotiations over raising the nation's debt limit, now at $31 trillion, were never supposed to arrive at this point — a crisis in the making.

From the White House, press secretary Karine Jean-Pierre said it was "ridiculous" to suggest Biden wasn't acting with urgency.

Negotiations are focused on finding agreement over a 2024 budget year limit.

Republicans have set aside their demand to rollback spending to 2022 levels, but say that next year’s government spending must be less than it is now.

But the White House instead is offering to freeze spending at current 2023 numbers.

China on US debt crisis

Meanwhile, China waded into the US crisis and called on America to work on its debt crisis and "not pass it on to" the world.

Mao Ning, China's Foreign Ministry spokesperson, urged Washington to adopt "responsible fiscal and monetary policies," the Chinese daily Global Times reported.

Mao also criticised Washington for what Beijing called an "unreasonable crackdown" on the Chinese social media app TikTok.

Urging Washington to "respect the market economy and fair competition rules," Mao said the US should "stop the unreasonable crackdown on foreign firms, and provide an open, fair, and non-discriminatory business environment."