House Speaker Kevin McCarthy said Friday that Republicans have paused crunch US debt default talks less than two weeks before a potentially catastrophic default, citing a lack of movement from Democrats. 

"We've got to pause," the Republican leader told journalists in Congress, adding, "We can't be spending any more money next year."

Negotiators for President Joe Biden have been meeting with Republicans in an attempt to reach an agreement on raising the US borrowing limit and allowing the country to pay its existing debts.

Republicans continue to insist that Biden agrees to spend cutbacks in exchange for their support for raising the debt ceiling, despite Democratic requests for a "clean" rise in the borrowing limit with no strings attached.

Democrats have framed the talks as a chance to tackle the upcoming budget ahead of June 1, when the Treasury foresees that the United States could start defaulting on its debts if Congress does not act.

The White House indicated on Friday that serious disagreements between the two parties over the budget persisted.

"There are real differences between the parties on budget issues and talks will be difficult," a White House official said in a statement, adding, "The President's team is working hard towards a reasonable bipartisan solution that can pass the House and the Senate."

Joe Biden, who is in Japan for the G7 summit of international leaders, is cutting his trip short and coming to Washington on Sunday to attempt to reach an agreement.  

Congress inaction on debt ceiling threatens US economy: Treasury

Deputy Secretary of the Treasury Wally Adeyemo said last Wednesday the US Congress' inaction in enabling the US to meet its obligations by raising the debt ceiling is the "greatest threat" to the US economy since the global pandemic. 

"The single greatest threat to the progress the American economy has made since the pandemic is Congress’s failure to take action to meet the United States’s obligations," Adeyemo said at the National Asian/Pacific Islander American Chamber of Commerce and Entrepreneurship (National ACE) 2023 Business Summit.

He further warned that failing to raise the debt ceiling would lead up to a recession and would severely impact small businesses and trigger a massive wave of company closures. 

"Congress must take action to raise the debt limit and do what is needed to protect families and small businesses, as it has done nearly 80 times before. It is the only way to maintain the economic progress we’ve made," he said.

Last week, the US Congressional Budget Office warned that if lawmakers fail to raise the amount of debt the country is legally allowed to build up, the US will be faced with a "significant risk" of defaulting within the first two weeks of June.

Read more: US not to default, agreement on raising debt ceiling nearing: Biden