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Biden and House Speaker Kevin McCarthy said they had a productive discussion on the debt ceiling late Monday at the White House, but there was no agreement and neither side seemed to give ground as Washington scrambled to raise the country’s borrowing limit on time. increase to avoid a potentially chaotic situation. federal standard.

It’s a pivotal moment for the Democratic president and Republican speaker, just 10 days before an approaching deadline to raise the debt limit.

Once June 1, Treasury Secretary Janet L. Yellen said in a letter to Congress, it is very likely that the government will not be able to pay all of the country’s bills. Such an unprecedented bankruptcy would be financially damaging to many Americans and others around the world who rely on US stability, sending shock waves through the global economy.

Both sides praised each other’s seriousness, but fundamental differences remained. A good example is how annual budget deficits can be reduced. Biden wants to raise some taxes for the richest Americans and some big companies, but McCarthy wants none of that.

Equities are mixed as Wall Street awaits US debt ceiling talks

The speaker said Republicans are determined to cut spending, while Biden wants to increase it.

That has to stop, and it has to end now, McCarthy after the Oval Office meeting.

In a brief statement after the meeting, Biden called the session productive, but added only that he, McCarthy and their chief negotiators will continue to discuss the way forward. McCarthy said their teams would work through the night.

Biden said everyone agreed that “default isn’t really on the table.”

While there is no agreement on fundamental issues, the outlines of a deal seem within reach. Negotiations are limited to a fiscal year 2024 limit, which would be key to resolving the stalemate. Republicans have insisted next year’s spending cannot exceed

2023 2022

levels, but the White House instead offered to keep spending at current numbers.

A budget deal would unlock a separate vote to raise the debt ceiling, now $31 trillion, to allow for more borrowing.

Time is getting shorter. The House speaker promised lawmakers he will abide by the rule of posting any bill 72 hours before a vote, making any action questionable until the end of the week, just days before the potential deadline. The Senate would also have to approve the package before it could go to Biden’s desk to be signed into law.

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After a weekend of start-stop talks, both Biden and McCarthy have declared they need to compromise. US financial markets fell last week after negotiations broke down amid a nervous economy.

Biden and McCarthy spoke by phone on Sunday as the president returned home on Air Force One after the attack

Group of seven

G-7 summit in Japan.

Biden used his closing press conference in Hiroshima, Japan, to say he had done his part in agreeing to cuts and to warn that it is time for Republicans to accept that no deal can be made alone, alone on their partisan conditions.

Now is the time for the other side to get out of their extreme position, he said.

The phone call between the two reignited talks, and the negotiators met at the Capitol for 2 1/2 hours late Sunday evening and said little as they left.

Keep working, Steve Ricchetti, an adviser to the president, said as the White House team ended talks late Sunday.

White House negotiators spent nearly three hours Monday morning with McCarthy’s team at the Capitol ahead of the White House session.

But McCarthy continued to blame Biden for previously refusing to deal with annual federal spending, a separate issue but tied to the national debt.

GOP lawmakers are sticking to demands for sharper cuts with caps on future spending, rejecting the alternatives proposed by the White House that call for deficit reduction, in part with new tax revenues.

McCarthy has personally insisted in his talks with Biden that tax increases are off the table.

Column: Debt ceiling negotiations were difficult when Biden was vice president. They’re even harder now

Republicans want to roll back next year’s spending to 2022 levels, but the White House has proposed keeping 2024 the same as it is now, in fiscal year 2023. Republicans initially tried to impose 10-year spending caps, though the latest proposal brought that back to about six. The White House wants a two-year budget deal.

A compromise on those top spending levels would allow McCarthy to deliver for conservatives, without being so harsh as to dislodge the Democratic votes it would take in the divided Congress to pass a bill.

Republicans also want job requirements for the Medicaid health program, though the Biden administration has countered that millions of people could lose coverage. The GOP additionally introduced new cuts to food aid by restricting states’ ability to waive job requirements in places with high unemployment. But Democrats have said any changes to job requirements for state aid recipients are out of the question.

GOP lawmakers are also pushing for cuts in IRS money and, saving defense and veterans bills from cuts, would shift most of the cuts to other federal programs.

The White House has countered this by leveling defense and non-defense spending next year, which would save $90 billion in fiscal year 2024 and $1 trillion over 10 years.

All parties have looked at the package’s potential to include a framework to relax federal regulations and accelerate energy project development. They will almost certainly recover some $30 billion in unused COVID-19 funds now that the pandemic emergency has officially been lifted.

For months, Biden had refused to enter debt limit talks, arguing that Republicans in Congress were trying to use the loan limit as leverage to force government concessions on other policy priorities.

But as June approaches and Republicans are putting their own spending bills on the table, the White House is starting talks on a budget deal that could involve raising the debt limit.

McCarthy faces a far-right flank that is likely to reject any deal, which has led some Democrats to encourage Biden to oppose any compromise with the Republicans and simply raise the debt ceiling single-handedly to avoid default.

However, the president said he is ruling out the possibility of invoking the 14th Amendment as a solution for now because it is an unresolved legal issue that will get stuck in the courts.

Miller reported and Associated Press writer Josh Book contributed from Hiroshima, Japan. Associated Press writers Kevin Freking, Farnoush Amiri, Seung Min Kim, Darlene Superville, Fatima Hussein, Colleen Long and Will Weisseert contributed to this report from Washington.