Biden and McCarthy attempt to end US debt-ceiling stalemate as default crisis approaches. President Joe Biden and senior Republicans and Democrats from Congress will meet this week to attempt to resolve a three-month deadlock over the $31.4 trillion U.S. debt ceiling and prevent a devastating default before May.

The Democratic president wants lawmakers to unconditionally lift the federal government’s self-imposed borrowing cap. Republican House Speaker Kevin McCarthy has stated his chamber would not adopt any deal that does not decrease spending to confront a mounting budget imbalance.

Biden, McCarthy, Schumer, and McConnell will meet at the White House on Tuesday for the first time since Feb. 1. The talks will include House Democratic leader Hakeem Jeffries.

Analysts do not expect a quick settlement to avoid a historic default, which the Treasury Department has warned might happen on June 1. Forecasters say a default would plunge the U.S. economy into recession and raise unemployment.

But active negotiations might calm investors who compelled the federal government last week to pay its highest rate ever for a one-month debt offering.

“Our seas are foamy. Calm them. “Some of that could come just from saying, ‘We’ve found areas of agreement, we’ve found areas of disagreement, we’re going to get back together and work on a solution,'” Republican Senator Thom Tillis told reporters late last week.

Fiscal negotiators and corporate lobby groups have suggested extending the debt ceiling through the November 2024 presidential elections and freezing expenditures.

In a deeply polarized society where Republicans command a slim House majority and Biden’s Democrats control the Senate by two votes, legislative standoffs are common.

The debt-ceiling conflict is significantly more important than budgetary disputes that have led to three federal government shutdowns in the last decade.

It hurts. Not easy. “But it is not catastrophic,” Democratic Senator Chris Coons said of earlier shutdowns. “Default would be catastrophic.”

For months, Biden has opposed linking budget negotiations to lifting the debt ceiling needed to pay for Congress’s spending and tax cuts.

“The two are unrelated,” Biden remarked Friday. Two different concerns. Let’s clarify.”

McCarthy has urged Democrats to offer their plan or pass a House-approved package that would cut spending over the next decade and require benefit recipients to work in exchange for lifting the debt ceiling by $1.5 trillion or until March.

In March, Biden recommended hiking taxes on firms and individuals earning more than $400,000 to slash deficits by $3 trillion over ten years.

Last Monday, the Treasury warned that it may be unable to pay all its obligations by June 1, maybe for weeks.

The Bipartisan Policy Center, a budget think tank, will announce its revised prediction on Tuesday, which may complicate discussions if it is later than Treasuries.

In 2011, a Democratic president and Senate and a Republican-led House came close to default.

Congress avoided default, but the economy suffered from the first-ever reduction of the U.S.’ top-tier credit rating and a severe stock selloff.

Financial markets are already worried about the deadlock, but a default would affect Americans more immediately.

“The thing for everyday folks is declines in their retirement savings, increases in interest rates that could affect their monthly payments for cars or houses—it’s just going to hurt a lot of people, and hurt low- and middle-income people the most,” said Democratic Senator Tim Kaine.

McCarthy agreed to a rule change that permits one member to petition for his resignation as a speaker, giving hardliners like the House Freedom Caucus more authority.