No Quad meeting after Joe Biden cancels Australia visit as US debt crisis peaks

With a looming domestic political and economic crisis at home and negotiations with the United States (US) Congress over the debt ceiling hitting a roadblock.

President Joe Biden has said that he will return to Washington DC after attending the G7 summit in Japan and not travel to Australia for the Quad leaders’ level summit.

Biden has also cancelled the Papua New Guinea leg of his trip; his visit would have been the first by any American president to a Pacific Island country.

Speaking at an event in the White House on Tuesday evening, Biden first gave a preview of his visit to Japan and then said, “The nature of the presidency is addressing many issues, all at once. So I am confident we are going to make progress in avoiding default and fulfilling America’s responsibilities on the world stage. However, I am cutting my trip short. I am postponing the Australia portion of my trip and my stop in Papua New Guinea in order to be back for the final negotiations with the Congressional leaders.”

While the US is locked in a political impasse between the Democratic administration and a Republican House over debt ceiling — unless the US Congress raises the ceiling, the US risks defaulting on its obligations for the first time in history after June 1 — Biden’s decision has caused uncertainty around the Quad leaders’ summit scheduled to be held in Sydney. It has also prompted the administration to send out signals that the US remained committed to allies and partners and resolving the debt impasse was essential for its global role.

Uncertainty around Quad meet

A little earlier in the day, the White House, in a statement, had officially announced that Biden would return to the US on Sunday after the G7 summit “to ensure that Congress takes action by the deadline to avert default.”

White House press secretary Karine Jean-Pierre said that Biden had spoken to Australian prime minister Anthony Albanese to inform him that he would be postponing his visit. “He also invited the Prime Minister for an official state visit at a time to be agreed by the teams. The President’s team engaged with the Prime Minister of Papua New Guinea’s team to inform them as well.”

Speaking to ABC Radio Sydney, Albanese confirmed that Biden had spoken to him, they had agreed to reschedule his visit for the future, and Biden had expressed his disappointment with some members of the US Congress.

Albanese appeared to suggest that Quad leaders could meet on the sidelines of the G7 in Japan or/and will meet separately in Australia in Biden’s absence.

The PM said that his government will speak to Japan and India to discuss the travel schedule of their leaders and added that Biden would “try to convene a [Quad] meeting given all four leaders are in Japan” for the G7. At the same time, Albanese said that the Quad dialogue in Sydney could still take place with a senior US representative. There is speculation in Washington DC that Secretary of State Antony J Blinken may fill in for Biden.

Albanese, however, expressed the confidence that Biden’s visit won’t change PM Modi’s schedule. “Prime Minister Modi has a bilateral programme that’s organised. So I am certain that he will be here.” The PM referred to the large Indian diaspora in Australia and mentioned that a large event was to be held next Tuesday, May 23. Modi is expected to address the diaspora gathering.

The debt ceiling crisis
Back in Washington, Biden met the Congressional leadership — House speaker Kevin McCarthy, House minority leader Hakeem Jeffries, Senate majority leader Chuck Schumer and Senate minority leader Mitch McConnell — on Tuesday afternoon in the Oval Office to find a way out of the impasse.

The debt ceiling crisis refers to a unique feature of the American political economy. While the US Congress authorizes spending, it also authorises a certain borrowing limit that the executive cannot exceed to meet its expenditure. The US had hit its debt ceiling of $31.4 trillion on January 19 and since then, the Treasury department has resorted to extraordinary measures. On June 1, unless the Congress raises the debt limit or suspends it, the US is at the risk of defaulting on its credit, a move that will jolt the markets and create an unprecedented economic crisis both at home and abroad.

While Biden has officially maintained that it is the US Congress’s duty to raise the debt ceiling and he would not negotiate on the issue, McCarthy has pushed forward a Republican proposal that would entail dramatic spending cuts including in social welfare programmes and Biden’s signature legislations passed over the past two years.

After Tuesday’s talks, McCarthy said that they have a “format, a structure” for the talks while Biden called the meeting “productive” and said that there was an “overwhelming consensus” in the meeting that defaulting the debt was not an option. But the impasse persists and there is no deal on the table at the moment.

A message of reassurance
With Biden’s foreign policy engagements becoming a clear casualty of polarised American politics, the administration sought to send a message of reassurance to allay apprehensions that the visit’s postponement can potentially generate among allies and partners.

Jean Pierre said that revitalising and reinvigorating America’s alliances and advancing partnerships such the Quad remained a key priority for the President. “This is vital to our ability to advance our foreign policy goals and better promote global stability and prosperity. We look forward to finding other ways to engage with Australia, the Quad, Papua New Guinea and the leaders of the Pacific Islands Forum in the coming year.”

At a regular White House press briefing earlier in the day, John Kirby, the coordinator for strategic communications at the national security council, had hinted that the second half of Biden’s visit was being reevaluated. When asked if the President wasn’t going to Australia anymore, Kirby had said that Biden would have had the “opportunity to meet with Prime Minister (Narendra) Modi and Prime Minister (Anthony) Albanese anyway at the G7”.

Asked about the implications of the debt ceiling showdown on American credibility abroad, Kirby said, “These leaders, all leaders of democracies, they understand…want…respect American leadership on the world stage. And they know that our ability to pay our debts is a key part of US credibility and leadership around the world. And so, they understand that the President also has to focus on making sure that we don’t default and on having these conversations with congressional leaders.” Kirby added that they would not be having this discussion at all if the US Congress “did its job” and raised the debt ceiling.

An administration official reiterated to HT that the cancellation was purely to do with domestic American developments and the President was “absolutely committed” to the Quad, a free and open Indo-Pacific and the relationship with India.

The official pointed out that the India and the US have busy diplomatic calendar ahead. “The two leaders will meet in Hiroshima. On June 22, the President will host Modi for a state visit in Washington DC. And in September, the President will visit New Delhi for the G20 summit. This will be a golden year for India-US relations and you will see tangible deliverables,” the official said, adding that as fellow democracies, India, Japan and Australia will understand Biden’s democratic compulsions at home.