Biden and McCarthy describe « productive » talks on debt limit, but no deal is reached

Biden and McCarthy describe productive talks on debt limit but | ltc-a

President Biden and President Kevin McCarthy expressed optimism on Monday that they could break the partisan stalemate that has prevented action to avoid a default on the nation’s debt, but they remained distant on a deal to raise the debt limit as the Democrats have resisted Republicans’ demands for spending cuts in return.

The two met face-to-face in the White House for the second time in two weeks in a show of goodwill following a weekend of behind-the-scenes clashes between negotiators, punctuated by a move by Republicans on Friday to halt talks and charges on both sides that the other was unreasonable.

With Biden’s return from a summit meeting in Japan, the tenor seemed to have changed considerably.

« We don’t have a deal yet, » McCarthy told reporters at the White House after the meeting. « But I felt the discussion was productive, » he said, later adding that he believed the tone of the talks was « better than any other time we’ve had discussions. »

« I think we can still get there, » said Mr McCarthy. « I think we can do it. »

He said he expected to speak with Mr. Biden daily until an agreement was reached.

With a default looming as soon as June 1, both Mr. Biden and Mr. McCarthy started their latest meeting sounding optimistic about finding common ground in a bid to avert economic catastrophe and left sending their best advisers to work out an agreement in the coming days .

« We still have some disagreements, but I think we might be able to get where we need to go, » Biden said as the two took their seats in the Oval Office. « We both know we have a significant responsibility. »

Mr. Biden said in a brief statement after the meeting that the talks had been « productive ».

« We have reiterated once again that default is out of the question and the only way forward is in good faith towards a bipartisan agreement, » he added, saying he and his negotiating team will continue to speak with McCarthy and his cohorts.

However, the two sides remained at loggerheads. The White House called Republican calls for spending cuts extreme, while McCarthy and his aides accused White House officials of being unreasonable.

The number of legislative days that Congress can vote to raise the debt ceiling before the deadline is rapidly declining. Treasury Secretary Janet L. Yellen reiterated it on Monday warning to Congress that the US could exceed its authority to borrow to pay bills as soon as June 1. He said in an interview with NBC’s « Meet the Press. » over the weekend the odds of the government being able to hang through mid-June — when a significant chunk of quarterly tax revenues are expected to arrive, giving the Treasury more breathing room to cover its obligations — were « fairly low. »

And Republicans have hinted that no deal would materialize until a default was truly imminent. When asked on Monday evening what it would take to break the deadlock, Mr McCarthy replied simply: « June 1 ».

Chief among the outstanding issues is how much overall to spend next fiscal year on discretionary programs and how long any spending caps should be in place. Republicans want to allow military spending to rise by cutting other programs. But they have shown some flexibility regarding how long they would try to limit overall spending, dropping from their initial demand of a decade to six years.

It’s longer than Mr. Biden wants. White House officials have proposed holding military and other spending, which includes education, scientific research and environmental protection, steady over the next two years.

« These are tough issues, » said Rep. Patrick T. McHenry, a North Carolina Republican and a key McCarthy ally, who was involved in the talks and attended the White House meeting. “A directive to cut spending year after year is the hardest thing to do in Washington, DC, but that’s the speaker’s directive to his negotiating team. It is our expectation to be able to get it.

Far-right members of McCarthy’s conference continued to pressure the speaker to accept nothing short of the spending cuts House Republicans passed last month in their debt-limit bill, which would have amounted to a reduction of an average of 18% over a decade.

“Republicans must #HoldTheLine on the debt ceiling to bring spending back to reality and restore fiscal sanity in Washington,” the House Freedom Caucus wrote on Twitter. “We spend over $100 billion in excess of federal tax revenue EVERY MONTH. Washington has a spending problem, not a revenue problem. »

Mr. McCarthy has expressed confidence he can keep his conference largely united on whatever deal he strikes with Mr. Biden, telling reporters on Capitol Hill ahead of the meeting that he believed it would attract support from both Democrats and Republicans.

« I strongly believe in what we are negotiating right now, the majority of Republicans will see is the right place to put us on the right track, » he said.

But he also suggested that members of his conference should be prepared to accept an end product that falls short of what some lawmakers are demanding.

« I don’t want you to think that at the end of the day, the bill that we’re going to make is going to fix all of this, » he said. “But it will be a step to finally recognize our problem and take a step in the right direction. And we’ll come back the next day and take the next step.

Once the negotiators have agreed on a deal, it will take some time to translate it into legislative text. Mr McCarthy has pledged he will give lawmakers 72 hours to review the bill, and said on Monday he believes negotiators should agree to a compromise this week to pass legislation that raises the debt ceiling before its scheduled deadline of 1 June.

House lawmakers were still unsure when they should be present to vote to avoid a default. The House, effective Monday evening, was scheduled to leave Washington beginning Thursday afternoon before Memorial Day weekend.

The two sides struck a deal in talks last week, including recovering some unspent funds from previously approved Covid-19 relief legislation.

Senior administration officials said Project NextGen, of the Biden administration $5 billion Covid vaccine development program, could be among the victims of those cuts. The program, modeled in part on the Trump administration’s Operation Warp Speed, is an effort to find different forms of vaccines that scientists believe may offer longer-lasting protection against the coronavirus.

But many other issues still need to be resolved, including tightening work requirements for able-bodied adults without dependents for some social safety net programs. The bill passed by House Republicans contained stricter requirements for recipients of Temporary Assistance for Needy Families and food stamps and is a key request by conservatives in the House.

Mr McCarthy said on Monday he would continue to push for their inclusion in any deal he reaches with Mr Biden, and White House negotiators have shown willingness to compromise on the issue.

Charles Hulse contributed report.