U.S. House Speaker Kevin McCarthy has said that he and President Joe Biden had a productive talk but have not yet reached a deal to avert a catastrophic U.S. debt default.
The two sat down at the White House for more than an hour Monday evening. Earlier, Treasury Secretary Janet Yellen warned that it is 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 ¡ª 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 U.S. economy, which is already vulnerable to a recession after a series of interest-rate hikes by the Federal Reserve, according to Bloomberg Economics.
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.
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