Biden and McCarthy hold a ‘productive’ debt ceiling meeting, but no deal yet

WASHINGTON — A meeting between President Joe Biden and House Speaker Kevin McCarthy on Monday afternoon to discuss a path forward to avert a debt limit breach failed to yield a deal, but both sides agreed that talks were “productive.”

“We don’t have an agreement yet, but I did feel the discussion was productive in areas that we have differences of opinion,” McCarthy, R-Calif., told reporters after leaving the Oval Office. He added that the “tone tonight was better than any other night we’ve had discussions.”

A White House official said disagreements remain, but echoed the speaker’s assessment that the meeting was overall “productive,” a word that continued to surface as negotiators fanned out.

It was a “solid” and “respectful” conversation, the official said.

Biden, who did not make public remarks, repeated in a statement the assessment that talks were “productive,” adding that talks between staff negotiators would continue.

With only days left until the June 1 deadline when the Treasury Department may be unable to pay the nation’s bills, urgency is mounting for Biden and McCarthy to find a path to raising the government’s borrowing limit.

McCarthy repeatedly stopped short of assuring that the two sides would reach a deal in time, saying he wished they had started negotiating before the final hour. He ruled out cuts to military spending as well as new revenues to reduce the deficit, which — along with his promise not to cut Social Security and Medicare — leaves a limited slice of the U.S. domestic budget on the chopping block. McCarthy also said he doesn’t support a short-term extension of the debt limit deadline, to buy the two sides time, and promised to honor the 72-hour rule to give members time to read an agreement before voting on a bill.

Biden said before the meeting he was “optimistic” about progress and told reporters in the Oval Office that default was not an option. 

“The American people would have a real kick in their economic wellbeing,” Biden said. “As a matter of fact, the rest of the world would too.”

Asked whether an agreement on overall spending could break the logjam, Biden said “that alone” would not suffice. The president said he also wanted to close tax “loopholes and making sure the wealthy pay their fair share.”

The two sides agreed that reducing the deficit is a priority, he said, but are at odds over spending cuts and measures to raise revenue.

“While there are areas of disagreement, the Speaker and I, and his lead negotiators Chairman McHenry and Congressman Graves, and our staffs will continue to discuss the path forward,” Biden said in the statement.

“We do have disagreements,” said McCarthy, adding that revenue had grown. But the speaker said he and Biden “both agree that we need to change the trajectory, that our debt is too large.”

Earlier, McCarthy has said he’s insisting on an agreement to “spend less” than current levels in a deal, although he was mum when asked if the total amount would be somewhere in between this year and fiscal 2022 levels. McCarthy drew a line against cuts to military spending prior to meeting with Biden: “I don’t think you should put America in jeopardy. To me, it is off the table.”

The White House is eyeing health savings as one area for compromise with Republicans as the two sides seek to bridge a policy gap trillions of dollars wide, according to a source familiar with the talks. The savings would target areas of federal programs, like Medicare Part B, where the government is seen as overpaying private healthcare companies, this source said.

Most importantly, the source said, such “savings” would be considered “revenue” for Democrats in these negotiations — allowing both sides a win.

A major outstanding question is whether Biden and McCarthy can reach a deal that has the votes to pass the Republican-led House and Democratic-controlled Senate in a short period of time. And if a bill is passed with mostly Democratic votes in the House, will McCarthy face an uprising from his hard-line members. A push for sharper budget cuts has become a source of tension inside the Republican caucus, as some conservatives fear McCarthy may be willing to strike a deal with Biden that doesn’t go far enough.

Source: NBC NEws

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