US Republicans upbeat on prospects for debt deal

Top US Republican Kevin McCarthy said Thursday he saw "the path" to a breakthrough in talks to avert a looming debt default -- suggesting a vote would be possible as early as next week.

The government is expecting to hit the federal debt ceiling by as soon as June 1, raising the possibility of the world's largest economy defaulting on repayments on its $32 trillion debt and igniting a firestorm in global markets.

"We're not there -- we haven't agreed to anything yet -- but I see the path that we could come to an agreement," the House speaker said in his most upbeat assessment yet of the stand-off between Republicans in Congress and Democratic President Joe Biden.

"I think we have the structure now and everybody's working hard."

McCarthy secured the House speaker's gavel in January by pledging to his party's hard-right fringe that any raise in the borrowing limit would only come with deep cuts to federal spending.

Democrats point out that the debt limit has been raised dozens of times without budget negotiations, and accuse the Republicans of holding the US economy "hostage."

Congressional leaders have held two rounds of talks with Biden, but time is running out for legislation to move through Congress before the coffers run dry.

Any deal would need to pass the Republican-led House and the Democratic-majority Senate ahead of the deadline, and McCarthy said he estimated the lower chamber would need four days, while senators could pass a bill in seven.

"I always said before, it would be important to try to have agreement -- especially in principle -- by some time this weekend," he added.

The White House tapped two new negotiators this week to represent Biden in the high-stakes talks -- presidential aide Steve Ricchetti and Office of Management and Budget director Shalanda Young, a former House staffer.

"I have the greatest respect for Shalanda and for Ricchetti. I mean they are exceptionally smart," McCarthy said.

"They are strong in their beliefs on the Democratic side... They're working through it in a very professional manner."

Some Senate Democrats are urging Biden to invoke the 14th Amendment to the Constitution -- which states that "the validity of the public debt of the United States... shall not be questioned" -- to lift the borrowing cap and avert default on his own, without the approval of Congress.

Previous administrations have looked at the viability of the move, however, and voiced concerns that if it were challenged in court, it could undermine the full faith and credit of the United States.

"This does not have to be a crisis. Our position is clear and simple: Congress must act to prevent default," Vice President Kamala Harris told reporters at a separate briefing.

"That is what Congress has done more than 70 times... since 1960 and that is what it did three times under the previous administration. America must pay our bills."