President Joe Biden and Speaker Kevin McCarthy prepare for a Monday showdown at the White House as the clock ticks toward a June 1 deadline to prevent the country from defaulting on its debts.
Biden rekindled talks — after they stalled over the weekend — when he called McCarthy from Air Force One as he returned to the United States after attending the G7 summit in Japan.
The speaker described the conversation as “productive.”
McCarthy sounded optimistic when he spoke to reporters on Capitol Hill and said that after his conversation with the president, he hoped a deal would be struck.
“Time is of the essence,” he noted.
President Joe Biden called House Speaker Kevin McCarthy aboard Air Force One as he traveled back to the United States from Japan. Biden boards Air Force One at US Marine Corps Air Station Iwakuni after attending the G7
House Speaker Kevin McCarthy, photographed in the Capitol Rotunda on Sunday, described his conversation with Biden as “productive.” Biden and McCarthy will meet in Washington on Monday after Biden returns from Japan
Staff-level talks resumed shortly after the two leaders met. White House aides Shalanda Young, Louisa Terrell and Steve Ricchetti met Republican Representatives Garret Graves and Patrick McHenry – who make up McCarthy’s team – for two and a half hours on Capitol Hill Sunday night.
“We’ll keep working tonight,” Ricchetti told reporters as the teams left the speaker’s office.
The Treasury Department, meanwhile, is sticking to its June 1 deadline to raise the country’s borrowing limit, now at $31 trillion, so the United States can pay its bills. Otherwise, it will default on its debt.
“I think that’s a hard deadline,” Treasury Secretary Janet Yellen said on NBC’s Meet the Press. “It’s hard to be absolutely sure about this, but my guess is that the chances of us reaching June 15 while we can pay all our bills are pretty slim.”
A US bankruptcy could trigger a global economic recession. When the talks failed on Friday, the stock market crashed.
Any deal must be bipartisan, both sides have acknowledged. The Republicans have a majority of only five seats in the House and the Democrats control the Senate.
Negotiations now focus on budget cuts.
Graves said talks focused on the scope and duration of new restrictions on federal spending.
Shalanda Young, director of the Office of Management and Budget, a top mediator for President Joe Biden in the debt limit talk, will return to Capitol Hill on Sunday as talks resume
Steve Ricchetti, adviser to the president and a top mediator for President Joe Biden in the debt talks, returns to Capitol Hill on Sunday after negotiations hit a hiccup earlier this weekend
Once that’s in place, he noted, “everything else flows in a waterfall.”
McCarthy said after his call with Biden, “I think we can fix some of these issues if he understands what we’re looking at.”
“But I have been very clear with him from the beginning. We need to spend less money than last year,” he said.
Biden, meanwhile, expressed exasperation at Republicans, calling on them to abandon their “extreme positions” and realize that any deal must be bipartisan.
The president also said he would consider using the 14th Amendment to fix the US debt limit, even though he admitted it’s probably too close to the standard June 1 deadline to use it in this round.
“I look at the 14th Amendment as if we have the authority or not,” he said at a news conference in Hiroshima on Sunday night.
“I think we have the authority. The question is whether it can be done in time and it can be invoked that no appeal is lodged and as a result the relevant date is exceeded and the debt is still in default?’
Biden said he would be open to exploring the option in the courts to see if they would declare it legal or not.
The president had previously ruled out that the constitutional amendment – which some legal scholars say contains a clause that would make it unconstitutional for the US to default on its debts – would be used to raise the debt ceiling.
Biden also accused Republicans of trying to stop the debt talks to hurt his re-election bid, admitted he might be able to stop them from defaulting, and said he would step in to deal one-on-one with speaker Kevin McCarthy. An.
Treasury Secretary Janet Yellen (right) reiterated to NBC’s Chuck Todd (left) on Meet the Press Sunday that June 1 remains the default deadline as debt talks are on the cusp
During his press conference, Biden spoke harshly for the Republicans, criticizing them for taking an “extreme position” in the talks, and said he would speak with Air Force One’s McCarthy as he flew home from Japan.
“I suspect he wants to deal directly with me to make sure we’re all on the same wavelength,” Biden said of McCarthy, adding that he believed compromise remained within reach.
“I hope Speaker McCarthy is waiting to negotiate with me when I get home. …I’m waiting to find out.
The White House had accused House Republicans of taking the talks backwards by refusing their offer to cut spending and instead making what Democrats call outrageous demands for the federal budget to be cut.
Biden, announcing he is seeking a second term in office, indicated he believes politics are involved.
He said that if the nation defaults, “Biden would take the blame and that’s one way to make sure Biden doesn’t get re-elected.”
“Based on what I’ve offered, I’d be innocent. As far as the politics of it go, no one would be innocent,” he said.
He called on Republicans to compromise.
It is time for the Republicans to accept that there is no agreement between two parties that can only be made – exclusively – in their turn and on their terms. They also have to move,” he said.
He also expressed some annoyance with the other party, saying he “cannot guarantee they would force a default by doing something outrageous.”
Previous debt negotiations took a downward turn when both sides accused each other of negotiating in bad faith.
Republicans turned down an offer from the Biden administration that would have kept both non-defense and defense spending flat next year compared to fiscal year 2023, according to reports.
McCarthy said he wants to cut non-defense spending compared to what was spent in previous years.
Democrats argue that keeping those numbers the same amounts to an effective reduction due to inflation, at a rate of up to 5%.
The White House argued that, with inflation, that would equate to a 5% cut in spending.
Both parties are fighting over budget cuts. Republicans are demanding them in exchange for raising the debt limit.
House Republicans passed a bill that would roll back spending to the 2022 fiscal level and impose a 1% cap for the next 10 years. But it was dead on arrival in the Democratic-controlled Senate.
The White House has dismissed the GOP demands as too extreme, but has expressed a willingness to make some cuts.
To reach a deal, the cuts must be significant enough to be accepted by conservative Republicans, but also acceptable to Democrats, who hold the Senate and likely need to garner between 50 and 100 votes in the House.
Republicans want to increase defense spending in the 2024 federal budget in addition to spending cuts.
Democrats are calling for social programs, education and health care to bear the brunt of the cuts. The progressive wing of the Democratic Party would not support that.
In addition, Republicans have refused to reverse Trump-era tax breaks for businesses and wealthy households, as Biden has proposed.