The Democratic president and the top congressional Republican have struggled to make progress on a deal, as McCarthy pressures the White House to agree to spending cuts in the federal budget that Biden considers "extreme," and the President pushes new taxes on the wealthy that Republicans reject.
"I felt we had a productive discussion. We don’t have an agreement yet," McCarthy told reporters after an hour of talks with Biden in the Oval Office. He said their staffs would continue talks and added, "I believe we can still get there."
They have just 10 days to reach a deal – until June 1 – to increase the government’s self-borrowing limit or trigger an unprecedented debt default that economists warn could bring on a recession.
Biden said before the meeting started that he was "optimistic" they could make some progress. Both sides need a bipartisan agreement to "sell it" to their constituencies, he said, adding there may still be some disagreements.
Treasury Secretary Janet Yellen on Monday offered a sobering reminder of how little time is left, saying the earliest estimated default date remains June 1 and that it is "highly likely" that Treasury will no longer be able to pay all government obligations by early June if the debt ceiling is not raised.
White House aides met with Republican negotiators on Capitol Hill for two hours on Monday, and early indications were that the talks had gone well.
Any deal to raise the limit must pass both chambers of Congress, and therefore hinges on bipartisan support. McCarthy’s Republicans control the House 222-213, while Biden’s Democrats hold the Senate 51-49.
A failure to lift the debt ceiling would trigger a default that would shake financial markets and drive interest rates higher on everything from car payments to credit cards.
