By Steve Holland and David Brunnstrom
WASHINGTON (Reuters) -An unfolding crisis over the U.S.&nbsp;debt&nbsp;ceiling&nbsp;prompted President Joe&nbsp;Biden&nbsp;on Tuesday to postpone plans to&nbsp;visit&nbsp;Papua New Guinea and&nbsp;Australia, cutting short an upcoming Asia trip so he can return to Washington.
Biden&nbsp;will still leave on Wednesday en route to Hiroshima, Japan, to attend a three-day G7 summit. Afterward, he was to have been the first sitting U.S. president to&nbsp;visit&nbsp;Papua New Guinea.
In the PNG capital Port Moresby, he was to have witnessed the signing of a new strategic agreement with Micronesia and meet with 18 Pacific island leaders.
In Sydney,&nbsp;Biden&nbsp;had planned to attend a meeting of the four so-called Quad nations - the United States, Japan,&nbsp;Australia&nbsp;and India. The group was formed with a mind toward countering China's rising influence in the Indo-Pacific region.
Biden&nbsp;told reporters he spoke by phone to&nbsp;Australian Prime Minister Anthony Albanese to explain his decision. "Defaulting on the&nbsp;debt&nbsp;is simply not an option," said&nbsp;Biden, who is locked in talks with congressional Republicans.
White House spokesperson John Kirby said&nbsp;Biden&nbsp;would be able to meet Albanese and Indian Prime Minister Narendra Modi while in Hiroshima. He also has meetings planned there with the leaders of Japan and South Korea.
Biden's team also spoke to Papua New Guinea's leaders to inform them of his decision, the White House said. The embassy of Papua New Guinea did not immediately respond to a request for comment on the postponement.
Albanese said in a statement that&nbsp;Biden&nbsp;had apologized for not being able to&nbsp;visit&nbsp;Australia&nbsp;and that they would work to reschedule his&nbsp;visit&nbsp;at the earliest opportunity. He also said he would&nbsp;visit&nbsp;Washington later this year for a state&nbsp;visit&nbsp;to the United States.
The Treasury Department has estimated that the United States will go into a crippling&nbsp;default&nbsp;as early as June 1 if Congress does not lift the&nbsp;debt&nbsp;ceiling.
Gregory Poling, an Asia expert at Washington's Center for Strategic and International Studies think tank, said the curtailment of&nbsp;Biden&rsquo;s trip would be a blow to Papua New Guinea and&nbsp;Biden&rsquo;s efforts to woo Pacific island countries in the face of increasing competition from China.
&ldquo;I'm sure the White House will find ways to make this up to partners in the short term. But it adds to the evidence that U.S. domestic dysfunction weakens us abroad,&rdquo; he said.
(Reporting by Steve Holland, Nandita Bose and David Brunnstrom; additional reporting by John Mair in Sydney; Editing by Heather Timmons and Stephen Coates)

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Biden cancels Australia visit as debt ceiling default nears