WASHINGTON — President Joe Biden said he and House Speaker Kevin McCarthy need a deal to raise the debt ceiling that “we can sell to both sides” of a closely divided, hyper partisan Congress.
“We still have some disagreements, but I think we may be able to get where we have to go,” Biden said at the start of a highly anticipated meeting with McCarthy on Monday at the White House.
McCarthy shared Biden’s cautious optimism. “I think at the end of the day, we can find common ground, make our economy stronger, take care of this debt, but more importantly, get this government moving again to curb inflation, make us less dependent upon China and make our appropriations system work.”
Shortly before the meeting, Treasury Secretary Janet Yellen reaffirmed June 1 as the earliest date the U.S. could be at serious risk of debt default. Yellen’s latest letter to congressional leaders was similar to the letters she has sent throughout the spring. But on Monday, there were two subtle differences.
The first was that Yellen characterized a potential debt default in early June as “highly likely,” whereas last week it was merely “likely.” In Monday’s letter, she also notably excluded a line from last week, which predicted that the emergency actions Treasury is taking to cover government debts could extend the default deadline into June.
“The actual date Treasury exhausts extraordinary measures could be a number of days or weeks later than these estimates,” Yellen wrote in her letter to congressional leaders a week ago. But by Monday, her apparent optimism had vanished.
McCarthy said Monday that he believed June 1 to be a stone cold deadline. He also acknowledged that the reality of the legislative process has started to weigh on his calculus.
“I think we can get a deal tonight, we can get deal tomorrow, but you’ve got to get something done this week to be able to pass it [in the House] and move it to the Senate” in time to meet the June 1 deadline, he said.
The House is currently scheduled to leave for Memorial Day weekend, but McCarthy said he would keep the chamber in session as long as he needed in order to pass a bill. “We’re going to stay and do our job,” he said.
McCarthy spoke after three hours of negotiations between White House and House Republican envoys on Monday. One of the GOP negotiators, Rep. Patrick McHenry, R-N.C., later said he was “concerned about getting a deal that can pass the House, the Senate, and signed by the president.”
“It’s a complicated piece of math, it is,” McHenry told CNN. “We’re at a very sensitive point here, and the goal is to get something that can be legislated into law,” he added.
McHenry was joined in the talks by Rep. Garret Graves, R-La. The White House team is comprised of presidential counselor Steve Ricchetti, Office of Management and Budget Director Shalanda Young and legislative affairs director Louisa Terrell.
Yellen has repeatedly warned Congress and the public that the United States faces a hard deadline to raise the debt ceiling before the beginning of June.
“We expect to be unable to pay all of our bills in early June, and possibly as soon as June 1,” Yellen had said Sunday on NBC’s “Meet the Press.”
“My assessment is that the odds of reaching June 15 while being able to pay all of our bills is quite low,” she said, with the caveat that there would always be uncertainty about exact revenue and payments.
Both Biden and McCarthy have acknowledged that one of the main sticking points in the talks remains the question of spending caps, a key GOP demand but a red line so far for the White House. Raising the debt limit would not authorize new spending, but Republicans have insisted on sweeping cuts to government outlays as part of a deal to hike the borrowing limit.
“The underlying issue here is that Democrats, since they took the majority, have been addicted to spending. And that’s going to stop. We’re going to spend less than we spent last year,” McCarthy said to reporters Monday morning in the Capitol.
Biden is hoping to reach a debt limit deal that would push the next deadline out past the 2024 presidential election. But House Republicans, who so far have endorsed only a one-year hike, say that if Biden wants more time, then he will need to agree to even more cuts.
Biden and McCarthy’s meeting follows a dramatic weekend during which talks broke down Friday over an impasse on government spending levels, but resumed several hours later.
The two leaders then spoke by phone Sunday evening, a conversation they described as “productive.”
Over the weekend, the president faulted Republicans for demanding that huge chunks of federal discretionary spending be exempted from their proposed topline budget cuts, including defense and potentially veterans health benefits.
If these categories were actually to be exempted, Biden explained, then cuts to all the other discretionary spending would need to be much deeper in order to make up the difference.
Across-the-board cuts like these “make absolutely no sense at all,” Biden said Sunday in Japan, where he was attending the Group of Seven Summit. “It’s time for Republicans to accept that there is no bipartisan deal to be made solely, solely, on their partisan terms.”