House Speaker Kevin McCarthy is still optimistic that a debt limit deal will be reached before next week’s deadline.
Speaking to reporters Wednesday afternoon, McCarthy said negotiators were heading to the White House, where he believes progress will be made.
"First of all, let me tell the American public, I am not going to give up. We're not going to default. We're going to solve this problem," said McCarthy.
McCarthy added that both sides, Democrats and Republicans, are "still far apart" as they try to reach a budget deal with President Joe Biden.
But McCarthy’s message remained clear: The U.S. needs to spend less.
"Every Democrat voted against raising the debt ceiling. Nothing has happened in the Senate. I'm not a senator. I don't control the Senate. Why didn't they pass something?" McCarthy said. "The off ramp here is to solve the problem, to spend less than we spent last year; that's not that difficult. They still want to spend more. You cannot do that. No household would do that."
The debt ceiling could hurt your 401(k). Here's what you need to know
Some estimate a default on government loans could cause the S&P 500 to drop about 22%, wiping out years of earned wealth for millions of retirees.
However, Democrats don't want to make additional cuts beyond a point that would keep year-to-year spending flat.
The clock is ticking on a new debt ceiling agreement as the Treasury Department warned the country could default for the first time ever if there's no deal by next Thursday, June 1.
Speaking at a Wall Street Journal forum Wednesday morning, Treasury Secretary Janet Yellen said that "it seems almost certain" that the United States would not make it past early June without defaulting.
"Even in the run-up to an agreement, when one does occur, there can be substantial financial market distress; we’re seeing just the beginnings of it," Yellen said.
A potential default would have concerning consequences for the U.S. economy, resulting in the temporary suspension of government benefit payments that millions of individuals depend on.
Negotiators reportedly left their meeting Wednesday afternoon after a roughly four-hour session.
Representatives, meanwhile, are expected to leave D.C. ahead of the Memorial Day holiday — but may return if the debt impasse is resolved in time for a vote.
