WASHINGTON — President Joe Biden and House Speaker Kevin McCarthy are scheduled to meet Tuesday afternoon to discuss a way to break the logjam in the debt ceiling, amid fears of a self-inflicted economic calamity that grows as Republicans demand spending cuts.
Failure to reach an agreement to lift the debt limit threatens the nation’s first debt default of $31.4 trillion, an outcome that could prove catastrophic for the US economy and change the political landscape.
Treasury Secretary Janet Yellen said in a letter Monday that the United States is expected to exhaust all options to continue paying the country’s bills starting June 1, leaving Congress with less than three weeks to avoid the worst. of the cases.
“Our secretary just said that on June 1 we could run out of money. We only have so many days left,” McCarthy, a California Republican, said Monday. “So, no, I don’t think we’re in a good place. I know we are not.
The meeting between Biden, McCarthy and other congressional leaders was postponed from Friday; some lawmakers said they wanted to give staff-level negotiators more time to develop a framework for principals to discuss.
Biden met with McCarthy, Senate Majority Leader Chuck Schumer, DN.Y., Senate Minority Leader Mitch McConnell, R-Ky., and House Minority Leader Hakeem Jeffries, DN.Y., last Tuesday. Since then, White House and Capitol Hill staffers have held private meetings to consider a way forward, but have not said anything about the details of the negotiations. It is not clear how much progress they have made.
Vice President Kamala Harris is also expected to join Tuesday’s meeting, which is scheduled for 3 p.m. ET, according to a source familiar with her plans.
Schumer insisted Monday that default must «be off the table.»
«Speaker McCarthy must commit to the same,» he said. «The consequences of non-compliance are too dire.»
Biden has been reluctant to characterize the talks while they are ongoing, but said last week that he is «confident» that default can be avoided, and remained hopeful over the weekend.
“I remain optimistic because I am a born optimist, but I really do believe that there is a desire on their part, just like ours, to reach an agreement,” Biden said Sunday. «I think we’ll be able to do it.»
He did not respond when asked about his message to McCarthy.
The Republican-led House of Representatives is demanding spending cuts and policy changes to raise the debt ceiling. Biden and the Democratic-controlled Senate insist that paying the bills is non-negotiable and that next year’s budget must be dealt with separately.
With talks underway and a deal still out of reach, the schedule could derail Biden’s visit to Asia to meet his foreign counterparts.
The pressure to reach a deal is mounting even as the two sides seem far apart.
A debt ceiling bill passed by House Republicans would reduce the budget to fiscal year 2022 levels, cutting $131 billion from current spending. Democrats want to increase spending on health care, education and other domestic priorities, leaving the two sides to find other ways to cut spending; one possibility that Biden and the Republicans have raised is withdrawing unspent Covid funds. Another possibility is reforms that would speed up the permitting process for energy projects backed by the White House and centrist Sen. Joe Manchin, DW.Va.
Still, Biden has continued to press Republicans, calling the impending default «a manufactured crisis» and insisting that the onus lies with Congress to prevent it.
The White House has portrayed House Republicans as the only party to the talks willing to accept default as an outcome.
“Three of the four have said that we have to avoid default,” White House press secretary Karine Jean-Pierre told reporters on Friday. “They have been very clear: we have to take default off the table. I’ll let you guess who was the fourth that didn’t say that.»
kyle stewart, yamiche alcindor and Monica Alba contributed.