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WASHINGTON − President Joe Biden and House Speaker Kevin McCarthy appeared to make ever-so-slight progress toward a debt-ceiling deal in an Oval Office meeting Tuesday even as the speaker said the two sides remain far apart.
“It is possible to get a deal by the end of the week,” McCarthy told reporters following an afternoon meeting between Biden and congressional leaders that lasted less than an hour. “It’s not that difficult to get to an agreement.”
McCarthy applauded the administration’s installment of three White House aides to serve as lead negotiators in debt-ceiling talks with Republicans. Democratic leaders said both sides agreed the House and Senate must pass a “bipartisan bill” with backing from both parties to raise the debt ceiling.
“It was a good and productive meeting,” Senate Majority Leader Chuck Schumer said, adding that he believes a deal is closer than it was a week ago. “There were honest, real discussions about differences that we have on a whole variety of issues, but it was all respectful.”
Biden cuts short overseas trip to focus on debt ceiling
Vice President Kamala Harris, Senate Minority Leader Mitch McConnell and House Democratic Leader Hakeem Jeffries also attended the meeting, which was originally scheduled for last Friday but postponed as staff-level officials continued discussions.
“There was an overwhelming consensus, I think, in today’s meeting from the congressional leaders that defaulting on the debt is simply not an option,” Biden said.
Treasury Secretary Janet Yellen warned Tuesday that “time is running out” to avert a possible June 1 default and economic crisis. Expectations for the high-stakes White House meeting were modest but higher than last week’s gathering that failed to produce any breakthrough.
Ahead of the meeting, the White House confirmed Biden is canceling his upcoming visit to Australia and Papua New Guinea during the second leg of an overseas trip he begins Wednesday to return to the Washington to focus on debt-ceiling talks. Biden is still moving forward with participating in a G-7 summit in Japan.
McCarthy entered the meeting sounding less optimistic than the White House about the status of talks and took a shot at Biden’s overseas trip with the debt ceiling still in limbo. “I think the country wants an American president focused on solving American problems,” McCarthy said.
More:White House signals Biden might cancel trip to Australia over debt ceiling talks
How will debt-ceiling talks play out? Different scenarios to consider
It’s unclear when Biden and McCarthy will meet next to continue talks.
- Rattled markets, downgrade: Even if a deal is ultimately reached before June 1, markets could begin sliding earlier just by the threat of default. Yellen pointed to the “11th-hour brinksmanship” of the debt ceiling standoff in 2011 during the Obama administration that led to the first-ever downgrade of the U.S. credit rating in history and a 17% drop in the S&P 500 even though a default was averted.
- Will White House give in to cuts? Any deal between Biden and McCarthy to raise the debt ceiling will likely have to include some level of spending cuts in parallel budget talks for Republicans in Congress to get on board. But Biden must also find a resolution that satisfies his fellow Democrats.
Work requirements emerge as key sticking point in talks
Debt-ceiling talks have centered on expanded work requirements for some welfare programs, permitting reform for oil and gas projects, possible caps on future discretionary spending and rescinding unspent COVID-19 rescue funds.
Biden indicated Sunday that he’s open to expanded work requirements for some some federal benefits including food stamps, but not Medicaid. Some Democrats in Congress oppose stricter requirements for federal aid, however.
“Have the Democrats become so progressive, so far to the left, that they’re changing their policies now?” McCarthy said, noting that Biden and other Democrats helped pass work requirements in the 1990s.
One priority of Republicans that appears off the table is rescinding Biden’s Inflation Reduction Act, which Democrats in Congress passed last year to provide historic climate funding and lower prescription drug prices. Biden has slammed Republicans for trying to strip the landmark law.
Republicans have demanded that spending cuts be a part of congressional action to raise the debt ceiling and avoid a default that would occur if the U.S. is unable to pay its bills.
Biden has said he won’t negotiate with Republicans about raising the debt ceiling, which he’s said should take place without conditions. But he’s left the door open to bargaining with Republicans by saying he’s willing to discuss budgets separately − not under the threat of default.
Reach Joey Garrison on Twitter @joeygarrison
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