Updated May 16, 2023 at 4:46 PM ET
President Biden and top congressional leaders met at the White House to continue talks on raising the nation's debt limit, and while no major breakthrough appeared to come out of the session, House Speaker McCarthy told reporters a deal was possible by the end of the week.
McCarthy noted one point of movement from today's meeting: that someone from the president's team has been appointed to work with the speaker's team.
"What has changed in this meeting is the president has changed the scope of who's all negotiating," he said. "The structure of how we negotiate has improved. So it now gives you a better opportunity," he said.
McCarthy said he hopes the appointed individuals can start meeting as soon as today "and just start meeting until we get this done."
For the Democrats, Senate Majority Leader Chuck Schumer called the meeting "productive" and said all leaders agreed to continue working toward a bipartisan bill that could clear both the House and Senate.
"Default is a disaster — full stop — and everyone understood that in the room," Schumer told reporters, stressing "it was all respectful."
Biden has cut a planned trip short as the debt limit deadline looms
Leading up to Tuesday's meeting the president has struck an optimistic tone about finding a deal, but McCarthy has been publicly critical of the White House's approach to the talks, warning there is little time to reach a deal and describing what he sees as little movement.
Biden is set to leave Wednesday for a trip to the G-7 leaders' summit in Japan and after, to Australia to meet with the leaders of what's known as the Quad: the U.S., Australia, Japan and India. On the way to Sydney, Biden had planned to stop in Papua New Guinea to meet with leaders of Pacific Island nations.
"Look, the president of the United States, he can make that decision one way or another. But all I know is we got 16 more days to go. I don't think I'd spend eight days somewhere out of the country. I think the country wants an American president focused on solving American problems," McCarthy told reporters.
Biden did decide to cancel the planned trip to Australia following the G7 because of the looming debt ceiling deadline, the White House announced Tuesday afternoon. "President Biden will return to the United States on Sunday, following the completion of the G7 summit, in order to be back for meetings with Congressional leaders to ensure that Congress takes action by the deadline to avert default," White House Press Secretary Karine Jean-Pierre said in an afternoon statement.
Potential areas of common ground
A source familiar with the discussions, who spoke on condition of anonymity to describe private negotiations, said there were potential areas of common ground between the two sides, including clawing back some unspent COVID aid money (roughly $60 billion), and permitting reform to speed up approval for new energy projects. But the two sides were still far apart on spending caps for federal programs for some length of time (the White House is pushing for a two-year timeframe, but House Republicans want one that lasts 10 years) and new work requirements for adults without dependents who receive support from safety net programs like food stamps. They also remain divided on "revenue raisers" like closing loopholes in the tax code, the source said.
The source described staff conversations as very productive, noting that they met over the weekend and through Monday. Staff meetings would continue when Biden travels to Asia, the source said.
McCarthy told reporters on Monday "there's no progress" and "we have no agreements on anything." He was skeptical the group could hammer out a deal by the weekend. McCarthy suggested that was the timeframe needed for an outline of a bill so that aides would have enough time to draft legislation, have both chambers vote on it, and get it to the president's desk before the "X-date" — the date that the Treasury Department believes the country will run out of money to pay its bills.
Treasury Secretary Janet Yellen sent top leadersa letterlate Monday reiterating that the U.S. would hit the debt ceiling by early June, as early as June 1.
For weeks the White House insisted the administration would not negotiate unless Republicans agreed to first pass a clean bill to increase the debt limit without any conditions. But the president signaled he was open to some of these ideas, which were included in the bill that the House approved last month, including using savings from unspent COVID funds. He noted that he voted for the "tougher aid programs" that are in the law now, but he thought any new work requirement rules should be different for Medicaid, but was waiting to see the details of what Republicans were proposing.
Progressive Democrats on Capitol Hill rejected changing any of the current rules for food stamps and raised alarm bells that this was part of the negotiations. Sen. John Fetterman, D-Pa., released a statement Monday evening saying: "I didn't come here to take food away from hungry kids, and that's exactly what this proposal would do; a proposal that would make Scrooge blush."
On Tuesday morning, McCarthy pushed back at the notion that the president would not agree to work requirements for Medicaid, saying the issue is a red line for him. He also argued there was bipartisan support for these kinds of rules for all government programs, not just some, and as a senator, Biden voted for similar rules. "Are the Democrats become so progressive, so far to the left, they're changing their policies now and they want to put the country in default?" McCarthy asked.
Democratic aides say they have pressed for tax increases as part of any spending cap deal. But last week Rep. Dusty Johnson, R-S.D., called revenues a red line for McCarthy.
Over the weekend, the president sounded more upbeat about how the talks were going, telling reporters, "It's never good to characterize a negotiation in the middle of the negotiations. I remain optimistic because I am a congenital optimist. But I really think there is a desire on their part as well as ours to reach an agreement. And I think we'll be able to do it."
Neil Bradley, executive vice president and chief policy officer for the U.S. Chamber of Commerce, who is urging lawmakers in both parties to reach a deal, said on C-SPAN Monday that "there's a real risk for miscalculation" for lawmakers to not leave enough time to finalize a deal and approve it before the early June deadline for avoiding a default.
NPR's Barbara Sprunt contributed to this report
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