WASHINGTON — President Joe Biden and congressional Republicans are still far from resolving the looming U.S. default crisis, but a deal is still possible by the end of the week, GOP House Speaker Kevin McCarthy said after an Oval Office meeting Tuesday with Biden and other Democratic leaders.
Meanwhile, Biden cut short an upcoming foreign trip because of the urgency of the talks. He will still attend a Group of Seven summit in Japan this week but will then hurry home rather than going to Australia and Papua New Guinea as planned.
For all the talk of a dire debt-limit outcome, there was overriding agreement after the White House meeting that the first default in U.S. history must be averted.
From left, House Speaker Kevin McCarthy of Calif., and Vice President Kamala Harris listen Tuesday as President Joe Biden speaks during a meeting with Congressional leaders in the Oval Office of the White House.
“Number one, we know we’re not going to default,” said Republican Senate leader Mitch McConnell. But he added: “We’re running out of time.”
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Said Democratic Senate Majority Leader Chuck Schumer: “Hopefully we can come to an agreement. … Default is just the worst, worst alternative.”
McCarthy said one important development from the meeting was that the president “changed the scope” of who is negotiating in the staff conversations that have been slow going over the past week.
Steve Ricchetti, counselor to the president, and Shalanda Young, the director of the Office of Management and Budget, will try to negotiate an agreement directly with McCarthy’s team. The speaker said he tasked Rep. Garrett Graves, R-La., as point man for the speaker on debt and budget for the talks with the White House team.
“Now we have a format, a structure,” McCarthy said as he returned to the Capitol. A White House readout of the meeting said Biden directed his staff to “continue to meet daily on outstanding issues” in the talks and that he would check in this week with leaders by phone.
Senate Majority Leader Chuck Schumer of N.Y., right, and House Minority Leader Hakeem Jeffries of N.Y. talk to reporters Tuesday after meeting with President Joe Biden, Vice President Kamala Harris, House Speaker Kevin McCarthy of Calif., and Senate Minority Leader Mitch McConnell of Ky. at the White House in Washington.
Tuesday’s meeting was pivotal as negotiators are staring down a June 1 deadline, which is when the Treasury Department says the U.S. could begin defaulting on its debts for the first time in history.
Biden is to leave Wednesday for Japan but will cancel the later stops, said three people with knowledge of the decision who were granted anonymity to discuss the unannounced decision.
National Security Council spokesman John Kirby said Biden will already have met with some of the leaders of the “Quad” — the purpose of the Australia leg of the visit — while in Japan.
“We wouldn’t even be having this discussion about the effect of the debt ceiling debate on the trip, if Congress would do its job, raise the debt ceiling the way they’ve always done,” Kirby said.
Biden seemed upbeat that “we’ll be able to do this” as the White House meeting began. Others in the Oval Office — Vice President Kamala Harris, McCarthy, Schumer, McConnell and House Minority Leader Hakeem Jeffries — sat soberly.
Senate Minority Leader Mitch McConnell of Ky., right, and House Speaker Kevin McCarthy of Calif. talk to reporters Tuesday after meeting with President Joe Biden, Vice President Kamala Harris, House Minority Leader Hakeem Jeffries of N.Y., and Senate Majority Leader Chuck Schumer of N.Y. at the White House in Washington.
McCarthy has been far more pessimistic than Biden on the state of the talks. He and other Republicans demand big budget cuts in exchange for their support for raising the debt ceiling. Biden insists the two issue must not be linked.
“How much is too much?” McCarthy said about the nation’s $31 trillion debt load, as he pushed for stricter work requirements on government aid recipients.
Even as the Democratic president and the Republican speaker box around the politics of the issue — with Biden insisting he’s not negotiating over the debt ceiling and McCarthy working to extract spending cuts — various areas of possible agreement appeared to be emerging.
House Speaker Kevin McCarthy and Senate Minority Leader Mitch McConnell talk to reporters Tuesday after meeting about the debt ceiling with President Joe Biden and others at the White House in Washington.
Among the items on the table: clawing back some $30 billion in untapped COVID-19 money, imposing future budget caps, changing permit regulations to ease energy development and putting bolstered work requirements on recipients of government aid, said those familiar with the talks.
Congressional Democrats are concerned about the idea of putting new work requirements for government aid recipients after Biden suggested he may be open to such changes.
The White House remains opposed to changes in requirements for recipients of Medicaid and food stamp programs, though it is more open to revisions for beneficiaries of the Temporary Assistance for Needy Families cash assistance program.
The idea of imposing more work requirements was “resoundingly” rejected by House Democrats at a morning caucus meeting, according to one Democrat at the private meeting who was granted anonymity to discuss it.
Progressive lawmakers in particular have raised the issue. Rep. Pramila Jayapal, the chair of the Congressional Progressive Caucus, said, “We want to make sure that these negotiations do not include spending cuts, do not include work requirements, things that would harm people, people in rural areas, black, brown, indigenous folks.”
Democratic leader Jeffries’ staff sought to assuage the concerns late Monday, while a separate group of more centrist Democrats signaled to their moderate Republican colleagues they are prepared to work something out to reach a debt ceiling deal, aides said Tuesday.
An increase in the debt limit would not authorize new federal spending. It would only allow for borrowing to pay for what Congress has already approved.
