Congressional leaders emerged from a meeting with President Biden on Tuesday saying they were unable to break a monthslong impasse over raising the nation’s borrowing limit.
The U.S. risks defaulting on its debt in three weeks. A default would likely prompt international economic turmoil.
House Speaker Kevin McCarthy told reporters at the White House that no progress was made in resolving the debt impasse between Mr. Biden and congressional Republicans.
“Everyone reiterated the positions they were at,” said Mr. McCarthy, California Republican. “I didn’t see any new movement.”
The two sides are entering budget negotiations. The White House officially remaining opposed to slashing spending in exchange for raising the debt ceiling. Both sides said they would meet again on Friday and their respective staffs would start talking about government spending.
In a televised address after the meeting, Mr. Biden said he is “absolutely certain” that the U.S. will not default on its obligations.
“America is not a deadbeat nation. We pay our bills,” the president said.
He didn’t sound an optimistic tone about resolving the deadlock.
Mr. Biden said he has considered invoking the 14th Amendment, which some legal scholars believe allows the president to keep borrowing without raising the debt ceiling. He considered that option unlikely because it would take time to litigate.
“I made it clear we can cut spending and we can cut the deficit,” the president said. “We need to take the threat of default off the table.”
He said Mr. McCarthy has proposed “deep cuts that would hurt American families.”
The president ridiculed Republicans for proposing cuts that he said would eviscerate popular programs such as veterans benefits.
“I don’t think they’re sure exactly what they’re proposing,” Mr. Biden said.
The president said the impasse might keep him from attending the Group of Seven summit of leading industrial nations in Australia next week. He said he is committed to the conference for now.
Asked whether he trusts Mr. McCarthy in the negotiations, the president replied, “I trust Kevin will try to do what he says.” He noted that it took 15 votes to confirm Mr. McCarthy as speaker and asserted that Mr. McCarthy made “serious concessions” to more “extreme” members of his party.
Senate Majority Leader Charles E. Schumer, New York Democrat, said the negotiations will be separate from raising the debt limit of roughly $31.4 trillion. Treasury Secretary Janet Yellen has warned Congress that the government will be unable to pay some of its obligations as soon as June 1.
“The president asked all four of the leaders and himself to start sitting down as early as tonight … to see where we can come to an agreement on the budget and the appropriations process,” Mr. Schumer said. “There are probably some places we can agree and some places we can compromise, hopefully.”
Mr. Biden has long refused to negotiate on cutting spending in exchange for raising the debt limit. The White House argues that Democrats and Republicans contributed to the national debt and are responsible for raising the debt ceiling.
The deadlock comes at a perilous political moment for Mr. Biden, who announced his reelection bid two weeks earlier and is faltering in public opinion surveys. A major poll last weekend pegged his job approval rating at an all-time low of 36% and found Mr. Biden trailing former President Donald Trump by 6 percentage points in a hypothetical head-to-head matchup in 2024.
House Minority Leader Hakeem Jeffries told reporters that although Democrats objected to pairing spending talks with the debt limit, the agreement to start talks was “progress.”
Mr. McCarthy and Senate Minority Leader Mitch McConnell say any budget cuts would have to be paired with legislation raising the debt ceiling.
“Seven of the last 10 debt limit increases were attached to bipartisan government spending deals,” said Mr. McConnell, Kentucky Republican. “All three of the debt limit increases from 2017 through 2020 were attached to bipartisan government spending deals. So there’s no reason why our country should be drifting toward crisis.”
Mr. McConnell and 42 Senate Republicans released a letter last week citing unity behind House Republicans “in support of spending cuts and structural budget reform” as part of any debt limit deal.
Mr. McCarthy cited the letter as proof that Senate Democrats do not have the 60 votes necessary to pass a clean debt ceiling hike. The speaker said the only options for Mr. Biden are to start negotiations or accept the legislation that House Republicans passed last month raising the debt ceiling until May 2024.
“Ninety-seven days ago, I sat in the Oval Office with the president and said let’s find an agreement,” Mr. McCarthy said. “The House made sure we wouldn’t have a default because we raised the debt.”
The Republican legislation would raise the debt ceiling by $1.5 trillion while slashing spending by $4.8 trillion. Apart from raising the debt limit, the Republican bill would cut federal spending by $130 billion for the upcoming fiscal year and limit budget growth to 1% annually over the next decade.
The bill rescinds at least $90.5 billion in unspent pandemic relief, imposes new work requirements on welfare, cancels Mr. Biden’s student loan forgiveness program and scraps $200 billion in green energy tax credits.
Democrats say the House Republicans’ bill is a non-starter.
“Instead of giving us a plan to remove default, he gave us a plan to take default hostage,” Mr. Schumer said. “There are large differences. His bill doesn’t have a single Democrat in support.”
Since January, the Treasury Department has undertaken “extraordinary measures” to stave off default after the government hit its $31.4 trillion borrowing capacity. Those emergency tactics give the government enough room to cover only day-to-day expenses.
Evidence is already emerging that investors’ confidence in public debt is shrinking. On Thursday, the Treasury sold $50 billion of four-week securities at an interest rate of 5.84%. That was the highest interest rate on sales of U.S. debt since 2000.
The $50 billion bonds are set to mature on June 6, five days after a potential default. Last week, the Treasury sold bonds set to mature on May 30 at a rate of 3.83%.
• Haris Alic can be reached at halic@washingtontimes.com.
• Jeff Mordock can be reached at jmordock@washingtontimes.com.
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