Biden meets Congressional leader

US President Joe Biden on Tuesday (local time) met with congressional leaders in an effort to avoid a debt default.

"This afternoon, President Biden hosted Leader Schumer, Leader McConnell, Speaker McCarthy, and Leader Jeffries in the Oval Office for a productive and direct meeting about the need to ensure America does not default on its debt for the first time in our history, and on a budget agreement that can reach his desk," read the White House press release.

Republican and Democratic lawmakers have failed to reach an agreement to lift the USD 31.4 trillion debt ceiling, as negotiations continue.

"The President emphasized that while more work remains on a range of difficult issues, he's optimistic that there is a path to a responsible, bipartisan budget agreement if both sides negotiate in good faith and recognize that neither side will get everything it wants," added the release.

Treasury has cautioned the government could default as soon as June 1, an outcome that could have dire consequences for the economy, if no deal is made.

The negotiations on raising the nation's borrowing limit in order to avert a historic default is yet to be resolved.

The effects of an American default would reverberate throughout an already unsteady global economy.

The White House has made clear that defaulting on US obligations would have damaging effects that stretch well beyond economic concerns.

"That would certainly, from a national security perspective, have a detrimental effect," said Kirby of a potential US default. "Certainly in terms of our reputation and standing around the world, it sends a horrible message to nations like Russia and China who would love nothing more than to be able to point at this and say: 'See? The United States is not a reliable partner, the United States is not a stable leader of peace and security around the world.'"

Biden directed staff to continue to meet daily on outstanding issues. He said that he would like to check in with leaders later this week by phone, and meet with them upon his return from overseas.

"I think we set the stage to carry on further conversations," House Speaker Kevin McCarthy told reporters after the meeting Tuesday afternoon. "The president agreed to appoint a couple of people from his administration to sit down and negotiate directly with my team, so I found that to be productive personally."

McCarthy added he'd like to see the appointed individuals begin meeting as soon as today and "just start meeting until we get this done."