President Joe Biden and US House Speaker Kevin McCarthy reported productive talks on Monday about a debt ceiling compromise, but have yet to announce a breakthrough ahead of a possible June 1 deadline.
“I just concluded a productive meeting with Speaker McCarthy on the need to avoid default and catastrophe to our economy,” Biden said in a statement. “We reiterated once again that default is off the table and the only way forward is in good faith toward a bipartisan agreement.”
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But the two sides remain far apart over a deal to lift the debt ceiling.
“President Biden and I just had a productive meeting during our negotiations to raise the debt limit responsibly,” McCarthy said after the meeting. “It should have been done months ago, but there is a way for him to avoid paying off his debts.”
McCarthy ruled out defense spending cuts.
“Defense shouldn’t be on the table,” he said.
Negotiators will continue to talk through the night, McCarthy said.
McCarthy said new revenue was not an option. He also said a short-term extension was not an option.
US Treasury Secretary Janet Yellen has said lawmakers must raise the debt ceiling by June 1 or risk defaulting on US debt obligations. Exactly when the US will run out of money remains uncertain.
Yellen said June 1 remains a “hard deadline” on Sunday on NBC’s “Meet the Press.” She was not optimistic about Biden’s possible plans to use the 14th Amendment to unilaterally raise the debt limit.
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It “doesn’t seem like something that can be appropriately used in these circumstances given the legal uncertainty surrounding it and given the tight time frame we’re in,” she said.
The debt ceiling is the maximum amount of debt the U.S. Treasury Department can issue.
Yellen earlier said “A US bankruptcy would create an economic and financial catastrophe.”
House Republicans have passed a bill to cut spending by $4.8 trillion and raise the debt limit by about $1.5 trillion, or until March 31, 2024, whichever comes first. The Republican bill would remove energy and environmental tax credits from the Inflation Reduction Act and terminate Biden’s student loan. It would also set job requirements for some federal social programs, such as requiring Medicaid recipients to work 80 hours a month.
The Limit, Save, Grow Act would bring total discretionary spending in fiscal year 2024 back to fiscal year 2022 levels and limit annual growth to 1% for 10 years, according to the Committee for a Responsible Federal Budget. The Congressional Budget Office has estimated that the measure would reduce budget deficits “by about $4.8 trillion over the 2023-2033 period.”
Syndicated with permission from the Center Square.