Republican and Democratic lawmakers are accusing each other of negotiating an increase in the US’s borrowing authority in bad faith as signs grow that the parties are still a long way from reaching a deal to avoid a possibly cataclysmic default of its debt.
On the morning after a contentious meeting at the White House ended with an apparently exasperated Barack Obama walking out leaders of both parties seemed intent on fanning the flames of discord instead of damping them down. The threat of a debt downgrade and the failure to reach a debt deal sent the dollar lower in Asian trading on Thursday but Treasury yields were largely unaffected by the developments.
Mitch McConnell, the top Republican in the Senate who this week proposed that Congress use a complicated legislative manoeuvre to end the gridlock over a fiscal deficit reduction plan, said: “Republicans will not be reduced to being the tax collectors for the Obama economy . . . We won’t be seduced into calling a bad deal a good one.”