US may default June 1 without debt ceiling hike

STORY: U.S. President Joe Biden is summoning congressional leaders to the White House next week to try and hash out the partisan dispute over the debt ceiling.

Biden is calling all four of either parties' leaders in the House and Senate to sit down for discussions.

The move comes after the Treasury warned the government would be likely to default on some bills as early as June if Congress does not raise the debt ceiling.

"The yeas are 217. The nays are 215. The bill is passed."

A bill passed by House Republicans last week to raise the debt limit includes steep spending cuts which the Democratic-controlled Senate said they will not approve.

Democrat and Senate Majority Leader Chuck Schumer:

"The full faith and credit of the United States can not be held hostage. For months we asked Speaker McCarthy and Republicans to present a plan, a real plan, to avoid default with no brinksmanship, no hostage-taking. But instead of presenting a viable plan, last week Speaker McCarthy and House Republicans passed the Default on America Act, a hard right ransom note to the American people."

The White House has insisted on a ceiling increase with no strings attached. Biden has said he will only negotiate on budget cuts after a new limit is set.

"The most important thing we have to do in that regard is to make sure the threat by the Speaker of the House to default on the national debt is off the table."

Washington regularly sets a limit on federal borrowing, but also periodically lifts that limit to pay for spending Congress has already authorized.

"For over 200 years, America has never, ever, ever failed to pay its debt. To put it in capital and colloquial terms, America is not a deadbeat nation."

Treasury Secretary Janet Yellen and other policy experts have called on Washington to remove the limit, saying it amounts to a bureaucratic stamp on decisions already made.

Yellen has warned that a June debt default would: "trigger an economic and financial catastrophe".

However, the debt ceiling is supported by both Democrats and Republicans, and both parties have used it as leverage when their party doesn't control the White House.

In 2011, House Republicans successfully used the debt ceiling to extract discretionary spending limits from Democratic President Barack Obama.

The showdown took the country to the brink of default and led to a downgrade of the country's top-notch credit rating.