President Biden and congressional leaders will resume face-to-face talks on Tuesday to avoid a government default, and the White House expressed cautious optimism as the contours of a potential deal began to come into focus.
With time running out to reach an agreement to increase the debt limit, broad areas of negotiation have emerged, including hard caps on federal spending, recovery of unspent funds designated for the Covid-19 emergencytougher work requirements for federal benefits and expedited permit rules for energy projects.
“I remain an optimist because I am a born optimist,” Biden told reporters Sunday in Rehoboth Beach, Delaware. He added: “I really think there’s a desire on their part, as well as ours, to come to an agreement, and I think we’ll be able to.”
Still, on Monday, Chairman Kevin McCarthy reiterated that he believed little progress had been made, telling reporters the two sides remained “very far apart” even with a possible default looming. “We have no agreements on anything. That’s why I’m so worried,” he added.
Treasury Secretary Janet L. Yellen reiterated Monday that the United States may not be able to pay its bills before June 1 if it does not raise or suspend the debt limit, which limits the amount of money the country can borrow.
That The limit of 31.4 trillion dollars was reached on January 19, and the Treasury Department has been using accounting maneuvers to keep paying government bills. In a letter to lawmakers on Monday, Ms Yellen warned that the actual date “could be several days or weeks later than these estimates,” but she urged Congress to act quickly to prevent a default.
The Treasury Department has been using accounting maneuvers known as extraordinary measures to keep paying the nation’s bills without breaking the debt ceiling.
Republicans have said they want to cut federal spending before raising the cap, but Biden has argued that negotiating cuts should not be a condition of raising the cap and avoiding what could be a catastrophic default.
Wall Street and White House economists say a prolonged default could eliminate jobs and send the country into a recession.
Mr Biden, who is due to leave for Japan on Wednesday to attend the Group of 7 meeting, confirmed on Monday that he would meet Mr McCarthy on Tuesday. The meeting will be at 3:00 p.m., according to the White House.
Sen. Chuck Schumer of New York, the majority leader, sounded more optimistic than McCarthy on Monday, saying “side discussions” over federal spending and the debt ceiling were continuing “in a very serious way.”
“We welcome a bipartisan debate on our nation’s fiscal future,” said Mr. Schumer. “But we have made it clear to our fellow Republicans that default is not an option. Its consequences are too harmful, too severe. It should be taken off the table.”
The two sides had their first face-to-face meeting at the White House last Tuesday, but ended no deal. They had been scheduled to meet again on Thursday, but that session was postponed to allow staff members more time to discuss in detail.
People familiar with the negotiations called the decision to postpone that meeting a positive development, which would give staff members more time to move forward.
“The talks are constructive between all parties,” said Wally Adeyemo, assistant secretary of the Treasury.
“The United States has never defaulted on its debt and we can’t,” Adeyemo said. “Because our debt default is not just about the financial markets. It’s about paying our Social Security recipients. It’s about paying our troops. This is about paying the men and women who work on the border today.”
Biden administration officials have said they will not agree to any deal that rolls back the president’s signature legislative gains, particularly on climate change. They want the Republicans to remove certain provisions in the debt limit bill that passed the House last month.
That measure is dead by the time it reaches the Democratic-led Senate, but the details are a sign of the Republicans’ bargaining position with the White House.
The bill would make able-bodied adults without dependents who receive federal food assistance and Medicaid benefits subject to work requirements until they are 55, an increase from 49. It also seeks to close a loophole that Republicans have claimed is abused by the states. , which allows officials to exempt food assistance recipients from work requirements.
Asked if he was open to tougher work requirements for relief programs, Biden said over the weekend that he had voted for such measures as a senator, “but for Medicaid it’s a different story.”
Michael Kikukawa, a White House spokesman, said Biden “has made it clear that he will not accept proposals that take away people’s health coverage.”
“The president has made it clear that he will not accept policies that push Americans into poverty,” Kikukawa said.
Conservatives had initially pushed to tighten those job requirements further, but more traditional Republicans in competitive districts balked.
alan rapport contributed reporting.
