House Speaker Kevin McCarthy on Tuesday said he “didn’t see any new movement” toward ending Washington’s standoff over the debt ceiling, as he assessed how a much-anticipated meeting on the issue went.
President Joe Biden hosted the meeting at the White House with the country’s four top lawmakers, and beforehand analysts had predicted it would not result in a deal.
McCarthy said the group plans to meet again on Friday. The California Republican said it was a sign of progress that top U.S. officials “were actually able to meet.”
Biden, for his part, said he had a “productive meeting with the congressional leadership about the path forward to make sure America does not default.”
The president also said he’s not ruling anything out, besides default, when asked about a short-term increase for the federal borrowing limit to provide his administration and Congress with more time to come up with a long-term solution.
In addition, Biden said the tenor of Tuesday’s meeting was “very measured and low key” with three out of four lawmakers, but “occasionally there would be a little bit of an assertion that maybe was over the top from the speaker,” referring to McCarthy.
The president suggested he didn’t see the 14th Amendment as one way out of the current stalemate, but he said he was thinking about taking a look at that “months down the road.”
See: Debt-ceiling solution? The 14th Amendment, explained.
In addition, Biden said he would skip his trip later this month to a G-7 summit in Japan, if necessary.
Senate Majority Leader Chuck Schumer, a New York Democrat, said after the meeting that the “bad news” was that McCarthy declined during Tuesday’s talks to take a U.S. default off the table, while Democrats were willing to do that.
Schumer said the “good news” was that Biden asked for staff from all sides to “start sitting down as early as tonight, certainly tomorrow, to see where we can come to an agreement on the budget and the appropriations process.”
As the meeting started, Biden began with a joke — and by not fielding questions from reporters before they were ushered out of the Oval Office.
“We’re not going to take any questions now. We’re going to get started, and we’re going to solve all the world’s problems,” he said.
If the meeting at the White House were to have concluded with an agreement, that would have been very surprising, according to Chris Krueger, managing director at TD Cowen’s Washington Research Group.
The best-case outcome from the huddle would have been a “short-term punt,” Krueger said in a note before the meeting.
In a similar vein, the Bipartisan Policy Center’s director of economic policy, Shai Akabas, said ahead of the meeting that he was looking for “any positive comments that are made or directional momentum” but that officials likely are “still several steps away from any type of resolution.”
The BPC on Tuesday estimated that the U.S. government will no longer be able to meet all of its obligations sometime between early June and early August if Congress doesn’t hike the debt limit. That falls in line with a Treasury Department forecast.
Read more: U.S. could run out of cash as soon as early June, Bipartisan Policy Center says
The Republican-controlled House of Representatives approved a debt-limit bill in a 217-215 vote two weeks ago, aiming to spark negotiations with Biden and his fellow Democrats.
McCarthy and his fellow Republicans are now getting those negotiations, as Biden on Tuesday afternoon welcomed him, Schumer and two other key players to the White House — House Minority Leader Hakeem Jeffries, a New York Democrat, and Senate Minority Leader Mitch McConnell, a Kentucky Republican.
Republican members of Congress have demanded spending cuts in exchange for raising the ceiling for federal borrowing, while Biden and his fellow Democrats have said the lift should be made without conditions.
“Congress has to do their job,” and raise the borrowing limit, White House press secretary Karine Jean-Pierre told reporters ahead of the meeting. She said a short-term extension of the debt ceiling is “not our plan.”
McCarthy also rejected a short-term move, as he was asked about aligning the debt ceiling with budget negotiations that would normally take place in the fall.
“No. We shouldn’t kick the vote. Let’s just get this done now,” the House speaker told reporters before Tuesday’s meeting.
Treasury Secretary Janet Yellen warned last week that the federal government’s first-ever default could happen as soon as June 1 if Congress doesn’t raise the borrowing limit.
Biden is slated to make a visit on Wednesday to New York’s Hudson Valley region, where he will deliver a speech that criticizes the House GOP’s debt-limit bill, dubbed the Limit, Save, Grow Act. That was viewed as an indication that the White House wasn’t expecting a big breakthrough in the talks on Tuesday afternoon.
U.S. stocks
SPX,
DJIA,
closed lower Tuesday as traders braced for the debt-limit meeting and a report due Wednesday on inflation.
Now read: Debt-ceiling standoff: As Biden and Republican lawmakers meet Tuesday, here’s what to expect
Also: Biden blasts Republicans for tying debt ceiling to budget, while GOP says Democrats did the same thing
Plus: ‘It’s ridiculous.’ Buy short-term Treasury bills because debt-ceiling deal will come, says bond legend Bill Gross
Robert Schroeder contributed to this story.
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