No agreement on debt ceiling, but Biden, McCarthy optimistic
Time to resolve standoff is growing short for both sides
House Speaker Kevin McCarthy said he had a productive debt ceiling discussion with U.S. President Joe Biden late Monday at the White House, but no agreement yet as Washington strains to strike a budget compromise and raise the nation’s borrowing limit in time to avert a potentially chaotic federal default.
It’s a crucial moment for the Democratic president and the Republican speaker, just 10 days before a looming deadline to raise the debt limit.
As soon as June 1 the U.S. could start running short of cash to cover its debts, a daunting situation. Treasury Secretary Janet Yellen said in a letter to Congress on Monday “it is highly likely” that Treasury would be unable to pay all the nation’s bills. An unprecedented default would be financially damaging for many Americans and others around the world relying on U.S. stability, sending shock waves through the global economy.
“We both talked about the need for bipartisan agreement,” Biden said at the start of the meeting.
The president said he was “optirent mistic we may be able to make some progress, because we both agreed default is not really on the table.”
McCarthy said afterward they had a “productive discussion. We don’t have an agreement yet.”
Ahead of the hour-long meeting both men said there remain disagreements.
The White House chief of staff and top administration negotiators joined the session, as did McCarthy’s own chief of staff as well as a top Republican involved in the negotiations, Rep. Patrick McHenry of North Carolina, the Financial Services Committee chair.
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 cur2023 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 (U.S.), to allow more borrowing. Yellen said Sunday that June 1 is a “hard deadline.”
McCarthy told reporters midday at the Capitol that “decisions have to start being made” since “we’re 10 days out” from the deadline.
“We have to spend less next year than we spent this year,” McCarthy reiterated and pointed to the House’s spending cuts as the “framework” for a deal.
“I’m hopeful,” he added. After a weekend of start-stop talks, both Biden and McCarthy have declared a need to close out a compromise deal.