House Speaker Kevin McCarthy said Monday there's been "no progress" on debt ceiling talks ahead of a meeting with President Joe Biden and other congressional leaders scheduled for Tuesday at the White House, as the country pushes closer to a crisis over the need to raise its legal borrowing limit.
"It's very concerning to me," McCarthy, the Republican speaker, told reporters as he opened the House chamber.
"There's no progress that I see," he said of the staff-level talks that extended through the weekend. "And it really concerns me with the timeline of where we are."
McCarthy confirmed that he and the other congressional leaders are heading back to the White House on Tuesday to meet with Biden. The meeting was initially supposed to be Friday, but was abruptly postponed so staff-level talks could continue through the weekend.
Meanwhile, Treasury Secretary Janet L. Yellen wrote in a letter addressed to Speaker McCarthy, "In my May 1 letter, I noted that our best estimate was that Treasury would be unable to continue to satisfy all of the government's obligations by early June if Congress does not raise or suspend the debt limit before that time. In that letter, I also noted that while it is impossible to predict with certainty the exact date when Treasury will be unable to pay all of the government's bills, I would continue to update Congress as more information before available."
Yellen went on to say in the letter, "With additional information now available, I am writing to note that we still estimate that Treasury will likely no longer be able to satisfy all of the government's obligations if Congress has not acted to raise or suspend the debt limit by early June, and potentially as early as June 1."
Time is narrowing as Biden prepares to depart for the Group of Seven summit in Japan on Wednesday. The standoff comes as the Treasury Department says the nation will be unable to pay its bills as soon as June 1. Biden's National Security Council spokesman John Kirby said that so far, "we are still planning to leave as scheduled."
Biden, who was in Philadelphia on Monday to attend granddaughter Maisy's graduation from the University of Pennsylvania, told reporters the meeting was on for Tuesday but did not elaborate on prospects for a deal.
The president remained hopeful that an agreement could be reached with Republicans to avoid what would be an unprecedented debt default, which could trigger a financial catastrophe.
"I remain optimistic because I'm a congenital optimist," Biden told reporters Sunday while out for a bike ride in Rehoboth Beach, Delaware. "But I really think there's a desire on their part as well as ours to reach an agreement. I think we'll be able to do it."
Aides said talks had continued throughout the weekend. Staff is narrowing on four areas of potential agreement that could begin to shape a budget deal that would unlock a separate vote to lift the nation's borrowing capacity. They are discussing clawing back untapped COVID-19 money, future spending caps, permitting reforms to ease energy development and bolstered work requirements for recipients of government aid, those familiar with the talks said.
But at least publicly, there was little indication that either the White House or House Republicans had budged from their initial positions. Biden has called on lawmakers to lift the debt limit without preconditions, warning that the nation's borrowing authority should not be used to impose deep spending cuts and other conservative policy demands.
Republicans led by McCarthy want Biden to accept their proposal to roll back spending, cap future outlays and other policy changes in the package passed last month by House Republicans.
"We've not reached the crunch point yet," Biden told reporters Saturday before flying to his beach home. "There's real discussion about some changes we all could make. We're not there yet."
Biden did signal over the weekend that he could be open to tougher work requirements for certain government aid programs, which Republicans are proposing as part of the ongoing discussion. He has said he will not accept anything that takes away people's health care coverage.
"I voted for tougher aid programs that's in the law now, but for Medicaid it's a different story," he said. "And so I'm waiting to hear what their exact proposal is."
Administration officials said the talks among staff had so far been productive after Biden and the leaders — McCarthy of California, House Democratic leader Hakeem Jeffries of New York, Senate Majority Leader Chuck Schumer of New York and Senate Republican leader Mitch McConnell of Kentucky — ended their first meeting last Tuesday without a breakthrough.
The president described that Oval Office session as "productive" even though McCarthy said later he "didn't see any new movement" toward resolving the stalemate. White House and congressional aides have been in talks since Wednesday.
"The staff is very engaged. I would characterize the engagement as serious, as constructive," Lael Brainard, head of the White House's National Economic Council, said on CBS' "Face the Nation."
McCarthy has insisted on using the threat of defaulting on the nation's debts to wrangle spending changes, arguing that the federal government can't continue to spend money at the pace it is now. The national debt now stands at $31.4 trillion.
An increase in the debt limit would not authorize new federal spending. It would only allow for borrowing to pay for what Congress has already approved.
The Treasury Department has said the government could exhaust the ability to pay its bills as early as June 1. The nonpartisan Congressional Budget Office gave a similar warning Friday, saying there was a "significant risk" of default sometime in the first two weeks of next month.
But federal estimates still remain in flux.
The CBO noted Friday that if the cash flow at the Treasury and the "extraordinary measures" that the department is now using can continue to pay for bills through June 15, the government can probably finance its operations through the end of July. That's because the expected tax revenues that will come in mid-June and other measures will give the federal government enough cash for at least a few more weeks.
"Ultimately the stakes are, the United States has never defaulted on its debt," Wally Adeyemo, the deputy treasury secretary, said on CNN's "State of the Union" on Sunday. "And we can't."
And Rep. Michael McCaul, R-Texas, told ABC's "This Week": "I think defaulting is not the right path to go down. So I am an eternal optimist.''
He added, "This is always a game we play, every Congress, you know, in daring each other to jump off the cliff. It's a dangerous game."
What do Republicans want in the debt ceiling fight?
Conservatives believe the debt limit should be raised in exchange for some spending cuts. Here's what they want.
