Chaos? Kumbaya? How the debt limit standoff might end

WASHINGTON (AP) — Just how does this debt limit standoff end?

Plenty of scenarios are being publicly and privately gamed out, but no one knows for sure. The possibilities range from kumbaya to economic chaos with plenty of possibilities in between.

So far, neither President Joe Biden nor House Speaker Kevin McCarthy, R-Calif., is giving ground ahead of talks slated for Tuesday. Biden wants to increase the government's $31.4 trillion legal borrowing limit, so that the federal government can continue to pay its bills and the risk of a historic default goes away. McCarthy and other GOP lawmakers want a deal that guarantees trillions of dollars in spending cuts before they sign on to raising the debt limit.

Time is short: The Treasury Department warns the U.S. could default as soon as June 1 if there is no deal.

A look at potential outcomes:

LET'S AGREE TO DISAGREE

The president wants to disarm the whole debate by having Republicans make a public commitment that the U.S. won't default. He'd then be ready to discuss spending, taxes and other budget issues.

He wants an assurance from McCarthy that the U.S. can keep paying all of its bills by having the ability to keep borrowing. The president says he's ready to have a public debate with GOP lawmakers about the budget, just not with the world's largest economy held “hostage.”

“As I’ve said all along, we can debate where to cut, how much to spend, how to finally move the tax system where everybody begins to pay their fair share,” Biden said. “But not under the threat of default.”

It's unclear how many GOP lawmakers share his definition of default. Some suggest a default would only apply to unpaid debt, while the administration wants to include the salaries of federal workers, repayments for contractors and aid to the poor,...