Biden, McCarthy hold meeting on debt as time grows short
WASHINGTON — President Joe Biden and House Speaker Kevin McCarthy were to meet Monday afternoon at the White House at a pivotal moment as Washington works to strike a budget compromise and raise the nation’s borrowing limit in time to avert a potentially chaotic federal default.
Negotiators for the White House met for nearly three hours with McCarthy’s team at the Capitol ahead of the session between the Democratic president and the new Republican speaker that will be critical as they race to prevent a looming debt crisis as soon as next week. The teams wrapped up at noontime, and no further talks were planned before the White House meeting.
After a weekend of start-stop talks, both men have appeared upbeat as they face a deadline, as soon as June 1, when the government could run out of cash to pay its bills.
By Monday morning, McCarthy took a sharper edge, blaming Biden for having refused to engage earlier on annual federal spending, a separate issue but linked to the nation’s debt.
“What we have to do here is get the spending addiction to stop,” McCarthy, R-Calif., told reporters as he arrived at the Capitol.
“The Democrats and the president refusing to even to negotiate, no household would run this way,” he said. “That is why we go from crisis to crisis.”
McCarthy said as he has many times before: “We’re going to spend less than we did last year.”
The contours of an agreement appear within reach, and the negotiations have narrowed on a 2024 budget year cap that would be key to resolving the standoff. Republicans have insisted next year’s spending cannot be more than current 2023 levels, but Democrats have refused to accept the steeper cuts McCarthy’s team proposed and the White House instead offered to hold spending flat.
A budget deal would unlock a separate vote to lift the debt ceiling, now $31 trillion, to allow more borrowing to pay bills already incurred. Treasury Secretary Janet Yellen said Sunday that June 1 is a “hard deadline.”
A top Republican negotiator Rep. Patrick McHenry of North Carolina told reporters that a round of talks late Sunday had gone “reasonably well.”
“We know the deadline, we know the challenge,” said McHenry, who is also chairman of the House Financial Services Committee, as he entered the morning session.
Three hours later, McHenry told reporters: “We’re at a very sensitive point here, and the goal is to get something that can be legislated into law.”
McHenry added, “with a divided government, everyone knows there are trade-offs.”
Biden and McCarthy spoke by phone Sunday while the president was returning home on Air Force One after the Group of Seven summit in Japan. “It went well, we’ll talk tomorrow,” Biden said in response to a shouted question upon his return late Sunday.
The call revived talks, and negotiators met for 2 ½ hours at the Capitol late Sunday evening, saying little as they left. Financial markets turned down last week after talks stalled.
“We’ll keep working,” said Steve Ricchetti, counselor to the president, as the White House team exited talks late Sunday.
McCarthy, R-Calif., told reporters earlier Sunday that the call with Biden was “productive,” and Biden told a press conference before departing from Japan: “I think that we can reach an agreement.”
But McCarthy said, “I’ve been very clear to him from the very beginning. We have to spend less money than we spent last year.”
GOP lawmakers have been holding tight to demands for sharper spending cuts with caps on future spending, rejecting the alternatives proposed by the White House that call for reducing deficits in part with new revenue from taxes.
McCarthy has insisted personally in his conversations with Biden that tax hikes are off the table
Republicans want to roll back next year’s spending to 2022 levels, but the White House has proposed keeping 2024 the same as it is now, in the 2023 budget year. Republicans initially sought to impose spending caps for 10 years, though the latest proposal narrowed that to about six. The White House wants a two-year budget deal.
McCarthy faces a hard-right flank that is likely to reject any deal, which has led some Democrats encouraging Biden to resist any compromise with the Republicans and simply raise the debt ceiling on his own to avoid default.
The president, though, said he was ruling out the possibility, for now, of invoking the 14th Amendment as a solution, saying it’s an “unresolved” legal question that would become tied up in the courts.