Debt ceiling deal appears no closer after high-stakes meeting, but leaders will huddle again Friday

WASHINGTON
— Top
congressional
leaders
left
a
high-stakes
meeting
with
President
Joe
Biden
on
Tuesday
showing
few
signs
they
had
moved
closer
to
resolving
a
debt
ceiling
impasse
and
removing
the
looming
threat
of
a
default.

The
officials
plan
to
meet
again
Friday
as
Washington
scrambles
to
lift
the
debt
ceiling
with
less
than
a
month
before
the
federal
government
is
set
to
run
out
of
money.
Biden
met
with
House
Speaker
Kevin
McCarthy,
R-Calif.,
and
Minority
Leader
Hakeem
Jeffries,
D-N.Y.,
along
with
Senate
Majority
Leader
Chuck
Schumer,
D-N.Y.,
and
Minority
Leader
Mitch
McConnell.

Speaking
after
the
meeting,
Biden
told
reporters
the
leaders’
staffs
agreed
to
continue
meeting
beginning
Tuesday
night
and
daily
through
Friday.

“Everyone
in
the
meeting
understood
the
risk
of
default,”
Biden
said.
“I
made
clear
during
our
meeting
that
default
is
not
an
option.”

McCarthy
told
reporters
he
did
not
see
“any
new
movement”
in
negotiating
positions
over
the
debt
limit
during
the
meeting.

“Everybody
in
this
meeting
reiterated
the
positions
they
were
at,”
before
the
meeting,
McCarthy
said
outside
the
White
House.

“I
asked
[Biden]
numerous
times
if
there
were
places
we
could
find
savings,”
in
the
federal
budget,
said
McCarthy.
“He
wouldn’t
give
me
any.”

Every
leader
present
except
for
McCarthy
agreed
to
remove
the
threat
of
default
when
asked
by
Biden,
according
to
Democratic
leaders
at
the
meeting.

“We
explicitly
asked
Speaker
McCarthy,
‘Would
he
take
default
off
the
table?’
He
refused,”
said
Schumer.
“Instead
of
him
giving
us
a
plan
to
remove
default
he
gave
us
a
plan
to
take
default
hostage.
And
that
is
a
shame,
because
it
makes
things
more
complicated.”

Biden
said
“I
don’t
know”
what
McCarthy
thinks.

“I
think
he
knows
better,”
the
president
said.
“I
think
he
knows
that
default
would
be
disastrous
and
I
think
he
knows
what
he’s
passed
could
not
possibly
pass
anywhere
in
the
Congress
—
it’s
dead
on
arrival.”

Asked
about
the
mood
in
the
room,
Biden
said
three
of
the
four
leaders
were
sensible
throughout
the
discussions.

“The
tenor
of
the
meeting
was
with
three
of
the
four
participants
very
measured
and
low
key.
Occasionally
there
would
be
a
little
bit
of
an
assertion
that
maybe
was
a
little
over
the
top
from
the
speaker,”
Biden
said.

Schumer
called
on
McCarthy
to
negotiate
proposed
spending
cuts
through
the
usual
budgetary
process
without
threatening
default.

“There
are
large
differences
between
the
parties.
If
you
look
at
what
President
Biden
had
proposed
and
you
look
at
what
Speaker
McCarthy
has
proposed,
they’re
very,
very
different,”
Schumer
said.
“We
can
try
to
come
together
on
those
in
a
budget
and
appropriations
process
but
to
use
the
risk
of
default,
with
all
the
dangers
that
has
to
the
American
people,
as
a
hostage
and
say
it’s
my
way
or
no
way,
or
mostly
my
way
or
no
way,
is
dangerous.”

McConnell
joined
McCarthy
outside
the
White
House,
where
he
reiterated
that
Congress
would
not
allow
the
country
to
default
on
its
debt.

“The
United
States
has
never
defaulted
on
its
debt
and
it
never
will,”
said
McConnell.
Still,
“there
must
be
an
agreement
…
and
the
sooner
the
president
and
the
speaker
can
reach
an
agreement
the
sooner
we
can
solve
the
problem.”

Jeffries,
speaking
to
reporters
after
the
meeting,
framed
House
Republicans
as
the
only
group
that
would
not
rule
out
the
prospect
of
a
first-ever
default
on
U.S.
debt.

“House
Democrats
have
taken
default
off
the
table;
Senate
Democrats
have
taken
default
off
the
table;
Senate
Republicans,
as
just
indicated
by
Leader
McConnell,
have
taken
default
off
the
table;
President
Biden
from
the
very
beginning
took
default
off
the
table,”
Jeffries
said.
“There’s
one
group
in
Washington,
D.C.,
extreme
MAGA
Republicans,
who
have
indicated
they
are
willing
to
take
us
down
a
path
of
default.
That
is
reckless,
irresponsible
and
extreme.”

Lifting
the
debt
ceiling
is
necessary
for
the
government
to
cover
spending
commitments
already
approved
by
Congress
and
the
president
and
prevent
default.
Doing
so
does
not
authorize
new
spending.
But
House
Republicans
have
said
they
will
not
lift
the
limit
if
Biden
and
lawmakers
do
not
agree
to
future
spending
cuts.

The
White
House
has
stressed
that
while
it
is
open
to
discuss
spending
cuts,
it
will
not
negotiate
with
Republicans
on
the
debt
ceiling.
The
Biden
administration
has
said
the
GOP
has
a
constitutional
responsibility
to
raise
the
borrowing
limit.

“Those
two
are
totally
unrelated.
Whether
you
pay
the
debt
or
not,
doesn’t
have
a
damn
thing
to
do
with
what
your
budget
is,”
Biden
said
Friday.
“They’re
two
separate
issues
—
two.
Let’s
get
it
straight.”

The
Treasury
Department
has
started
to
take
extraordinary
steps
to
keep
paying
the
government’s
bills,
and
expects
to
be
able
to
avoid
a
first-ever
default
at
least
until
early
June. Treasury
Secretary
Janet
Yellen

warned
Monday
that
failure
to
hike
the
debt
ceiling
would
cause
an
“economic
catastrophe.”

Defaulting
on
sovereign
debt
would
wreak
havoc
on
the
economy
and
roil
markets
around
the
world.
A
Moody’s
report
last
year
said
a
default
on
Treasury
bonds
could
throw
the
U.S.
economy
into
a
tailspin
as
bad
as
the
Great
Recession.

If
the
U.S.
were
to
default,
gross
domestic
product
would
drop
4%
and
6
million
workers
would
lose
their
jobs,
Moody’s
projected.
Even
a
brief
default
would
lead
to
the
loss
of
2
million
jobs,
according
to
the
data.

In
that
scenario,
U.S.
bond
ratings
would
be
classified
as
“restricted
default,”
according
to
Fitch
Ratings,
and
Treasurys
would
have
a
D
rating
until
the
U.S.
could
once
again
borrow.
The
Brookings
Institution
noted
a
default
could
lead
to
$750
billion
in
higher
federal
borrowing
costs
over
the
next
decade
—
a
twist
given
that
Republican
concerns
about
spending
and
debt
have
helped
to
fuel
the
borrowing-limit
stalemate.

What’s
more,
a
default
would
shake
the
U.S.
position
on
the
world
stage.
U.S.
Director
of
National
Intelligence
Avril
Haines
told
the
Senate
Intelligence
Committee last
week
that

Russia
and
China
will
take
advantage
of
the
U.S.
potentially
defaulting
on
its
debt.
Haines
warned
the
two
nations
would
attempt
to
highlight
“the
chaos
within
the
United
States,
that
we’re
not
capable
of
functioning
as
a
democracy.”

With
tight
margins
in
both
chambers
of
Congress,
gridlock
is
nothing
new.
But
when
it
comes
to
default
ultimatums,
the
president
has
pleaded
with
lawmakers
to
engage
in

“normal
arguments”
instead.

“As
I’ve
said
all
along,
we
can
debate
where
to
cut,
how
much
to
spend,
how
to
finally
overhaul
the
tax
system
to
where
everybody
has
to
pay
their
fair
share
or
continue
the
route
their
on,
but
not
under
the
threat
of
default,”
Biden
said
on
Friday.
“Let’s
remove
the
threat
of
default.
Let’s
have
normal
arguments.
That’s
why
we
have
a
budget
process
to
debate
in
the
open
so
you
all
can
see
it.”

Schumer
on
Tuesday
said
it
wasn’t
a
fair
negotiating
tactic
and
not
one
Democrats
used
when
former
President
Donald
Trump
was
in
office.

“When
President
Trump
was
president,
I
was
Democratic
Minority
Leader,”
Schumer
said.
“I
could
have
said
I’m
holding
[the
debt
ceiling]
hostage
unless
we
repeal
the
Trump
tax
cuts,
your
signature
issue.
But
McCarthy
is
saying
I’m
holding
it
hostage
unless
you
repeal
the
IRA,
which
was
our
signature
issue.”

Biden
said
he
trusted
McCarthy
would
do
what
he
promised,
but
added
that
the
speaker
is
in
a
tough
position.

“I
trust
Kevin
will
try
to
do
what
he
says,”
Biden
said.
“I
don’t
know
how
much
leeway
Kevin
McCarthy
thinks
he
has
in
light
of
the
fact,
and
I’m
not
being
a
wise
guy
when
I
say
this,
it
took
15
votes
for
him
to
acquire
the
speakership
and
apparently
he
had
to
make
some
serious
concessions
to
get
it
from
the
most
extreme
elements
of
his
party.
So
I
—
I
just
don’t
know.”

But
congressional
Republicans
are
united
in
their
refusal
to
vote
to
raise
the
limit
without
concessions.
They
view
Tuesday’s
meeting
as
a
long-awaited
face-to-face
negotiation
with
the
president.

If
the
meeting
is
indeed
a
negotiation,
then
the
bill
House
Republicans
passed
last
month
effectively
serves
as
the
GOP’s
opening
offer
to
the
White
House.

Dubbed
the
Limit,
Save
and
Grow
Act,

the
bill
would
impose
sweeping
cuts
to
federal
discretionary
spending,
impose
new
work
requirements
for
welfare
recipients
and
expand
mining
and
fossil
fuels
production,
all
in
exchange
for
raising
the
debt
limit
for
about
a
year.

But
rather
than
provide
a
jumping
off
point
for
talks,
the
GOP
bill
has
so
far
served
only
as
a
political
cudgel,
energizing
Democrats’
opposition
to
Republican
demands.

In
the
Senate,
Schumer
has
attacked
the
bill
on
a
near-daily
basis
ever
since
it
was
introduced.

The
White
House
also
has
pointed
to
some
of
the
the
bill’s
most
conservative
proposals
and
cuts
as
evidence
that
Republicans
are
willing
to
let
the
nation
default
in
order
to
slash
spending
from
key
programs.