Biden-McCarthy debt ceiling meeting fails. President Joe Biden and House Speaker Kevin McCarthy failed to reach a deal Monday on how to raise the $31.4 trillion debt ceiling, ten days before a possible default that could destroy the U.S. economy.
McCarthy encourages the White House to accept “extreme” government budget cutbacks, while Biden wants more levies that Republicans oppose.
After Monday night’s discussion, both parties underscored the need to avoid default with a bipartisan solution and said they’d be talking regularly.
A source said White House negotiators were returning to Capitol Hill on Monday night to restart discussions.
“We reiterated once again that default is off the table and the only way to move forward is in good faith toward a bipartisan agreement,” Biden said after the meeting, which he called “productive.”
After nearly an hour of meetings with Biden, McCarthy told reporters that negotiators were “going to get together, work through the night” to find common ground.
McCarthy added, “We can still get there.” He said he is focused on reducing spending in the 2024 federal budget and will not entertain Biden’s offer to cut the deficit by boosting taxes on the wealthiest and closing oil and pharmaceutical industry tax loopholes.
Democrats and Republicans have until June 1 to raise the government’s self-borrowing ceiling or risk a recession.
On Monday, Treasury Secretary Janet Yellen warned that the earliest estimated default date remains June 1 and that it is “highly likely” that Treasury will no longer be able to pay all government obligations by early June if the debt ceiling is not raised.
In the White House meeting, Republican Representative Patrick McHenry rejected a partial budget agreement to lift the debt ceiling. “No one’s going to agree to anything until we have a finalized deal,” he added.
He stated the Biden meeting was the most upbeat.
Raising the limit requires bipartisan support in both chambers of Congress. McCarthy’s Republicans control the House 222-213, and Biden’s Democrats the Senate 51-49.
A default would jolt financial markets and raise vehicle payment and credit card interest rates.
Investors awaited discussion updates on Monday, lifting U.S. markets.
If Biden and McCarthy agree, legislation will take days to pass Congress. McCarthy said a solution must be negotiated this week to pass Congress and be signed by Biden before default.
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