US interest in talks with North Korea indicated by Mike Pence

White House unveils $1.5tn infrastructure plan as analysts fear debts and deficits

US secretary of state Rex Tillerson: “It’s really up to the North Koreans to decide when they’re ready to engage with us in a sincere way, a meaningful way.” Photograph: Khaled Elfiqi/Pool photo via AP

US secretary of state Rex Tillerson: “It’s really up to the North Koreans to decide when they’re ready to engage with us in a sincere way, a meaningful way.” Photograph: Khaled Elfiqi/Pool photo via AP

 

The United States may be willing to hold talks with North Korea, vice-president Mike Pence has signalled, as he finished a week-long visit to Asia.

Speaking to the Washington Post on his return journey from South Korea, Mr Pence said the US and South Korea had agreed on the fringes of the Winter Olympics in Pyeongchang on the terms for further diplomatic engagement with North Korea. But he said that Washington would maintain its “maximum pressure campaign” against Pyongyang.

“The point is, no pressure comes off until they are actually doing something that the alliance believes represents a meaningful step toward denuclearisation,” he said. “So the maximum pressure campaign is going to continue and intensify. But if you want to talk, we’ll talk.”

His comments came as the North Korean delegation to the Olympic Games, led by the younger sister of the country’s leader Kim Jong-un, invited South Korea to a summit, following a series of bilateral meetings between the two sides at the Pyeongchang games. The attendance of Kim Yo-jong (30) at the games was widely seen as a PR success for North Korea despite deep scepticism in Seoul about the North’s intentions.

Speaking in Egypt on Monday, secretary of state Rex Tillerson said it was too early to say whether the latest developments represented the start of a diplomatic process.

“We’ve said for some time it’s really up to the North Koreans to decide when they’re ready to engage with us in a sincere way, a meaningful way,” he said when pressed on the matter during a press conference in Egypt. “They know what has to be on the table for conversations.”

Nuclear foes

The possibility of diplomatic engagement between the US and North Korea comes after severe tensions between the two nuclear foes, with President Donald Trump escalating his bellicose rhetoric towards Pyongyang.

Separately on Monday, the White House unveiled its long-awaited infrastructure plan – a key election promise of Mr Trump.

The $1.5 trillion (€1.2 trillion) plan sets aside up to $200 billion in federal funding over the next decade, which it hopes will stimulate an additional $1.3 trillion in investment by the private sector as well as state and local governments.

As much as $50 billion of the $200 billion will be specifically earmarked for rural investment, with most of the money channelled directly to state governors.

But the prospect of more federal spending, on top of the recent tax cut programme and last week’s budget deal, which envisages $300 billion worth of extra spending on defence and domestic spending priorities, is worrying many analysts, given its likely implications for debt and deficit levels.

Budget deficit

The infrastructure plan was part of a $4.4 trillion budget plan for 2019 unveiled by the White House on Monday and sent to Congress for approval. The Republican-controlled government appears to have abandoned the party’s long-held commitment to eliminating the budget deficit in a decade. Instead, the White House aims to close the deficit by 2039. Under the proposal, the deficit would increase by about $7 trillion over the next decade.

With Congress exercising control over budgetary spending, the plan is unlikely to be passed in its current form. Several members of Mr Trump’s own party are likely to resist the plan in Congress. Over the weekend, representative Mark Meadows, who leads the conservative Freedom Caucus in the House of Representatives, criticised last week’s temporary budget deal reached in order to end the government shutdown. “Our leadership caved. The swamp won. And the American taxpayer lost,” he said.

Under the proposal, the Trump administration estimates that economic growth will increase to 3 per cent this year, and 3.2 per cent in 2019, spurred in part by the $1.5 trillion tax cut signed by Mr Trump in December.

But some analysts believe the gross domestic product estimates are overly optimistic.