Republican leader says debt cliff talks with Biden went well

The United States took a small step back from the risk of a catastrophic debt default after the new Republican speaker of the House of Representatives, Kevin McCarthy, said talks with President Joe Biden went well -- even if a deal has yet to be reached.

"The president and I tried to find a way that we can work together," McCarthy told reporters after an approximately one-hour meeting with Biden at the White House. "I think at the end of the day, we can find common ground."

McCarthy said that while it was a "good discussion," he cautioned that there were "no agreements, no promises, except we will continue this conversation."

The White House also sounded positive, saying in a statement that Biden and McCarty had “frank and straightforward" talks and "agreed to continue the conversation."

At stake is the stability of the world's biggest economy.

Republicans are threatening to block the usually rubber-stamp approval for raising the nation's credit limit if Democrats don't first agree to steep future budget cuts.

The White House, meanwhile, accuses the Republicans of taking the economy "hostage" in order to posture as fiscally responsible.

Failure to raise the debt ceiling by around June, the Treasury says, and the United States will be forced into default on its $31.4 trillion debt -- a historic first that would leave the government unable to pay bills, undermine the US economy's reputation, and likely panic investors.

McCarthy said Republicans and Democrats have about five months to talk before reaching the debt cliff, but "hopefully it doesn't take that long."