House Speaker Kevin McCarthy said he and President Joe Biden had a productive talk but have not yet reached a deal to avert a catastrophic US debt default.
The two sat down at the White House for more than an hour Monday evening. Earlier, Treasury Secretary Janet Yellen warned it’s now “highly likely” her department will run out of sufficient cash in early June and that default could come as soon as June 1.
“The tone tonight was better than any other time we have had discussions,” McCarthy said as he emerged from the meeting. The two leaders, he said, “had a productive discussion. We don’t have an agreement yet.”
McCarthy said he expected to speak daily with Biden until a deal is sealed.
Ahead of the meeting, Biden urged that “we’ve got to get something done.” But he stressed Democratic demands to raise revenue in addition to spending cuts.
“Here’s the disagreement — I think we should be looking at tax loopholes and make sure the wealthy pay their fair share,” Biden said.
After the meeting, McCarthy stressed that Republicans won’t agree to any tax changes as part of a debt deal.
“No, we’re not looking at revenues,” he said.
The current standoff over the debt ceiling has the potential to put more strain on the US economy, which is already vulnerable to a recession after a series of interest-rate hikes by the Federal Reserve, according to Bloomberg Economics.
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Republicans want to slash domestic spending over as many years as possible, while Democrats have offered slimmer cuts over a couple of years. Democrats also want to include defense spending limits in any agreement.
That sets up a key tension for hawkish Republicans, who want to increase the Pentagon budget at the expense of deeper cuts in social spending. McCarthy said defense cuts shouldn’t be on the table.
The California Republican said he would not waive a rule that allows House lawmakers 72 hours to review legislation before a vote. Conservatives have demanded the time but it adds to the pressure to get a deal.
--With assistance from Erik Wasson, Jarrell Dillard, Steven T. Dennis and Anna Edgerton.
(Updates with adds throughout)