U.S. President Joe Biden and House Speaker Kevin McCarthy met Monday at the White House to negotiate raising the government’s borrowing limit.
Negotiators for the two sides met for more than two hours Sunday, while Biden and McCarthy spoke by telephone in a call that each described positively.
“It went well, we’ll talk tomorrow,” Biden told reporters upon returning to Washington from the Group of Seven summit in Japan.
McCarthy said the phone call was “productive.”
“I think we can solve some of these problems if he understands what we’re looking at,” McCarthy said. "But I’ve been very clear to him from the very beginning. We have to spend less money than we spent last year.”
The government could come up short and be unable to meet its financial obligations as soon as June 1.
Biden said earlier Sunday that House Republicans must move away from their “extreme position” on government spending and that there will be no agreement on only Republican terms.
“It's time for Republicans to accept that there is no bipartisan deal to be made solely, solely, on their partisan terms," Biden said at the end of the G-7 summit.
Biden said he had done his part by offering ways to raise the country’s $31.4 trillion borrowing limit so the U.S. government can keep paying its bills, such as interest on government bonds, stipends to U.S. pensioners and payments to health care providers and salaries for government employees and contractors.
Republicans in the House have called for sharp government spending cuts, rejecting the alternatives proposed by the White House, which has called for closing tax loopholes and more limited spending reductions. Previous presidents and congressional leaders have reached deals to raise the country’s debt limit 78 times in give-and-take negotiations in which neither side got everything on its wish list.
This time, Republicans want increased work requirements for able-bodied poor people receiving government assistance, but Democrats say that under such a proposal several hundred thousand people could lose the benefits they now receive. Republicans also are seeking cuts in funding for the country’s tax-collection agency and asking the White House to accept provisions from their proposed immigration overhaul to stem the tide of migrants trying to enter the U.S. at the Mexican border.
The White House has countered by keeping defense and nondefense spending flat during the next budget year starting October 1, which would save $90 billion in 2024 and $1 trillion over 10 years.
Treasury Secretary Janet Yellen told NBC’s “Meet the Press” show that the date when the government runs out of cash to pay its current bills remains uncertain, but that an expected June 15 infusion of tax payments may not come soon enough to avert a default.
“There's always uncertainty about tax receipts and spending,” Yellen said. “And so, it's hard to be absolutely certain about this, but my assessment is that the odds of reaching June 15th, while being able to pay all of our bills, is quite low.”
She said decisions have not been made on which bills would go unpaid if the government defaults.
“I would say we're focused on raising the debt ceiling and there will be hard choices if that doesn't occur,” Yellen said. “There can be no acceptable outcomes if the debt ceiling isn't raised, regardless of what decisions we make.”