President Biden and congressional leaders are set to resume face-to-face talks on Tuesday to avoid a government default, prompting the White House to be cautiously optimistic as the outlines of a possible deal begin to emerge.
As time runs out for an agreement to raise the debt ceiling, a fixed cap on federal spending, the recovery of unused funds designated as a COVID-19 emergency, stricter labor requirements for federal benefits, and a federal Broad areas of negotiation have emerged, such as expedited licensing rules. energy project.
“I remain optimistic because I am a natural optimist,” Biden told reporters Sunday in Rehoboth Beach, Delaware. I really think there is,” he added. And I believe it can be done. ”
Yet on Monday, House Speaker Kevin McCarthy reiterated his view that little progress had been made, telling reporters that the two countries’ positions were still “far apart” despite the looming possibility of default. . “We don’t have any agreement. That’s why I’m so worried,” he added.
Treasury Secretary Janet L. Yellen reiterated on Monday that the U.S. may not be able to pay its bills by June 1 unless it raises or suspends the debt ceiling that limits how much the U.S. can borrow.
That $31.4 trillion cap was hit on Jan. 19, and the Treasury Department is playing an accounting game to keep paying government bills. In a letter to lawmakers on Monday, Yellen warned that actual dates “may be days or even weeks later than these projections,” but she has called Congress to act swiftly to prevent a default. asked to do.
The Treasury Department has used an accounting maneuver known as an unusual move to keep paying the country’s bills without breaking the debt ceiling.
Republicans say they want to cut federal spending before removing the cap, but Mr. Biden said negotiating cuts was a condition to raising the cap and avoiding a potentially catastrophic default. argues that it should not.
Wall Street and White House economists say a prolonged default could cost jobs and plunge the country into recession.
Biden is scheduled to leave for Japan on Wednesday to attend the seven-party meeting, but confirmed on Monday that he will meet with McCarthy on Tuesday. The meeting is scheduled for 3:00 p.m., the White House said.
Majority leader Sen. Chuck Schumer of New York was more optimistic than Mr. McCarthy on Monday, saying the “parallel debate” on federal spending and the debt ceiling was going on “very seriously.”
“We welcome bipartisan debate on the future of our nation’s finances,” Schumer said. “But we have made it very clear to our Republican colleagues that default is not an option. The consequences are too harmful, too serious. It must be taken off the table. .”
The two sides held their first face-to-face talks at the White House last Tuesday, but ended without an agreement. The two were scheduled to meet again on Thursday, but that meeting was postponed to give staff more time to discuss the details.
People familiar with the negotiations see the decision to postpone the talks as a positive development, giving staff more time to move forward.
Deputy Treasury Secretary Wally Adiemo said, “The dialogue between all parties has been constructive.”
“The United States has never defaulted. We can’t do that,” Mr. Adiemo said. “Because default isn’t just about the financial markets. It’s about paying Social Security. That’s what it is.”
Biden administration officials said they would not accept any deal that would roll back the president’s signature legislative accomplishments, especially on climate change. They are calling on Republicans to remove certain provisions from the debt-saving bill that passed the House last month.
The bill was dead when it arrived in the Democratic-led Senate, but the details show how Republicans and the White House are negotiating.
The measure would require healthy, undependent adults who receive both federal food aid and Medicaid benefits to work until age 55, up from age 49. It also aims to close loopholes that Republicans claim are being abused by states. , which allows authorities to exempt food aid recipients from work requirements.
Biden, who has voted in favor of such measures as a senator, said over the weekend, when asked if he was open to improving working conditions in aid programs.
White House spokesman Michael Kikukawa said Mr Biden “has made it clear that he will not accept any proposal to strip the public of their health insurance.”
“The president has made it clear that he will not accept policies that drive Americans into poverty,” Kikukawa said.
The Conservatives initially called for even stricter labor requirements, but the battleground Republicans were hesitant.
Allan Lapeport Contributed to the report.