PHILADELPHIA – House Speaker Kevin McCarthy said Monday there's been “no progress” on debt ceiling talks ahead of a meeting with President Joe Biden on Tuesday at the White House, as the country pushes closer to a crisis over the need to raise its legal borrowing limit.
Compounding pressure on Washington to strike a deal, the Treasury Department on Monday left unchanged a deadline as soon as June 1 when the nation will have exhausted its ability to cover its debt payments, though Secretary Janet Yellen also suggested the so-called “X-date” could move days or weeks later than the estimate.
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“It's very concerning to me,” McCarthy, the Republican speaker, told reporters as he opened the House chamber.
“There’s no progress that I see,” he said of the staff-level talks that extended through the weekend. “And it really concerns me with the timeline of where we are.”
Time is narrowing as Biden prepares to depart for the Group of Seven summit in Japan on Wednesday. The standoff comes as the Treasury Department issued a new letter Monday outlining its ability to continue paying the nation's bills. Ahead of Biden's trip, National Security Council spokesman John Kirby said that so far, “we are still planning to leave as scheduled.”
The president remained hopeful that an agreement could be reached with McCarthy and other congressional leaders when they meet to avoid what would be an unprecedented debt default, which could trigger a financial catastrophe.
Biden, who was in Philadelphia on Monday to attend granddaughter Maisy’s graduation from the University of Pennsylvania, told reporters the meeting was on for Tuesday but did not elaborate on prospects for a deal. Now at $31 trillion, the debt limit must be lifted, as has been done countless times before, to allow continued borrowing to pay already accrued bills.
"I remain optimistic because I’m a congenital optimist," Biden told reporters Sunday while out for a bike ride in Rehoboth Beach, Delaware. "But I really think there’s a desire on their part as well as ours to reach an agreement. I think we’ll be able to do it.”
Yellen’s letter to House and Senate leaders Monday said that agency estimates are unchanged on the possible X-date when the U.S. could run out of cash.
But Yellen assessment leaves some opening for a possible time extension on a national default, stating that “the actual date Treasury exhausts extraordinary measures could be a number of days or weeks later than these estimates.”
She said she would update Congress next week “as more information becomes available.”
Aides said talks had continued throughout the weekend. Staff is narrowing on four areas of potential agreement that could begin to shape a budget deal that would unlock a separate vote to lift the nation's borrowing capacity. They are discussing clawing back untapped COVID-19 money, future spending caps, permitting reforms to ease energy development and bolstered work requirements on recipients of government aid, those familiar with the talks said.
But at least publicly, there was little indication that either the White House or House Republicans had budged from their initial positions. Biden has called on lawmakers to lift the debt limit without preconditions, warning that the nation’s borrowing authority should not be used to impose deep spending cuts and other conservative policy demands.
Republicans led by McCarthy want Biden to accept their proposal to rollback spending, cap future outlays and other policy changes in the package passed last month by House Republicans.
“We’ve not reached the crunch point yet,” Biden told reporters Saturday before flying to his beach home. “There’s real discussion about some changes we all could make. We’re not there yet.”
Biden did signal over the weekend that he could be open to tougher work requirements for certain government aid programs, which Republicans are proposing as part of the ongoing discussion. He has said he will not accept anything that takes away people’s health care coverage.
“I voted for tougher aid programs that’s in the law now, but for Medicaid it’s a different story,” he said. “And so I’m waiting to hear what their exact proposal is.”
Administration officials said the talks among staff had so far been productive. They have been meeting most days since Biden and the leaders — McCarthy of California, House Democratic leader Hakeem Jeffries of New York, Senate Majority Leader Chuck Schumer of New York and Senate Republican leader Mitch McConnell of Kentucky — first met last Tuesday.
“The staff is very engaged. I would characterize the engagement as serious, as constructive,” Lael Brainard, head of the White House’s National Economic Council, said on CBS’ “Face the Nation.”
McCarthy has insisted on using the threat of defaulting on the nation’s debts to wrangle spending changes, arguing that the federal government can’t continue to spend money at the pace it is now.
An increase in the debt limit would not authorize new federal spending. It would only allow for borrowing to pay for what Congress has already approved.
As the June 1 deadline approaches, the nonpartisan Congressional Budget Office gave a similar warning Friday, saying there was a “significant risk” of default sometime in the first two weeks of next month.
But federal estimates still remain in flux.
The CBO noted Friday that if the cash flow at the Treasury and the “extraordinary measures” that the department is now using can continue to pay for bills through June 15, the government can probably finance its operations through the end of July. That’s because the expected tax revenues that will come in mid-June and other measures will give the federal government enough cash for at least a few more weeks.
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Associated Press writer Chris Megerian in Philadelphia contributed to this report.