Biden and congressional leaders fail to reach a debt limit deal, but will meet again Friday

White House staff and aides to the four congressional leaders, however, will meet throughout the week to discuss the nation’s borrowing ceiling and future spending levels before Biden and the lawmakers get back together Friday. 

Biden said during brief remarks in the Roosevelt Room following the meeting that he believes the talks were “productive” and that he is looking for a debt limit agreement that addresses the ceiling for at least a year. 

He maintained that he would like to see negotiations on the debt limit and on future spending to remain on separate paths, but noted that staff will discuss federal funding levels ahead of the leaders’ next meeting on Friday. 

“I’ve said all along let’s discuss what we need to cut, what we need to protect, what new revenue we can raise, and how to lower the deficit to put our fiscal house in order,” Biden said. “But in the meantime, we need to take the threat of default off the table.”

House Speaker Kevin McCarthy said outside the White House following the late-afternoon meeting that “nothing has changed” since he met with Biden in early February — the last time the two discussed the issue.

“The only thing that has changed is the House has raised the debt ceiling and passed a bill. That’s why we had a meeting today,” McCarthy said. “Everybody at this meeting reiterated the positions they were at. I didn’t see any new movement. The president said the staff should get back together, but I was very clear with the president, we have now just two weeks to go.”

“If (Senate Majority Leader) Chuck Schumer could pass something, we’d go to conference right away and solve that, but I don’t think Chuck Schumer can pass anything. They haven’t dealt with it,” McCarthy, a California Republican, continued.

Schumer, also speaking after the meeting, said Biden asked the leaders to begin discussions on a compromise. 

“There are probably some places we can agree and some places we can compromise, hopefully, but that has to occur as part of the budget and appropriations process,” the New York Democrat said. 

Biden and Schumer have repeatedly said they want a “clean” debt ceiling bill. Biden said he would veto the House bill that Republicans pushed through following a 217-215 vote on April 26.

Neither McCarthy nor Schumer answered questions on whether Congress could reach a short-term deal to raise the debt ceiling while negotiations play out on annual funding levels. When asked about a short-term debt limit solution, Biden said: “I’m not ruling anything out.”

“I said I’d come back and talk. Really the one thing I’m ruling out is default,” Biden said.

Negotiations on the 12 appropriations bills occur annually, and are supposed to wrap up before the end of the fiscal year each Sept. 30 — though Congress hasn’t met that deadline in more than two decades. 

First-time meeting for all five

The White House meeting was the first time the five men sat down to discuss how to address the country’s borrowing limit amid a deep dispute between Democrats and Republicans. 

GOP leaders want to tie caps on some federal spending to the debt limit bill while Democrats argue Congress should pass stand-alone legislation before moving on to debate government spending during the appropriations process. 

The Treasury Department says without legislation to raise or suspend the debt limit, the country could default as soon as June 1 and the Bipartisan Policy Center places the window for default between early June and early August. 

Without a bipartisan deal, a default would prevent the Treasury Department from borrowing any more money to pay for spending Congress has already approved.

That would mean federal officials could not pay all of the nation’s bills in full and on time, leading to delays in checks going out for hundreds of federal programs. That would impact Social Security, Medicare, Medicaid, veterans’ benefits, federal employee salaries and much more. 

A default on the debt would be significantly different from the partial government shutdowns that have occurred a handful of times during the last decade. 

Depending on how long a default lasts, it could trigger a global recession and lead the United States to experience its first credit downgrade since 2011.

‘We’re running out of time’

Senate Minority Leader Mitch McConnell, a Kentucky Republican, said after the meeting the debt limit “can only be solved by the one person in America who can sign something into law, and by the majority of the opposite party in divided government.”

“Hopefully that’s the direction in which we’ll head now because we’re running out of time,” McConnell said after returning to the U.S. Capitol. 

McConnell sought to reinforce that the country will not default on the debt, saying it’s not unusual for negotiations on spending to move alongside talks on the debt limit. 

The situation, McConnell said, is similar to 2019, when he told then-President Donald Trump’s administration to negotiate a two-year spending caps and debt limit deal with then-Speaker Nancy Pelosi, a California Democrat.

“The way the deal finally came together is when I told President Trump — even though he was not excited about it — he had to reach a deal with Nancy Pelosi,” McConnell said. “That’s what President Biden needs to do.”

One major difference between this year and the Trump administration agreements is that the federal government was operating under a deficit reduction law known as the Budget Control Act during those negotiations. That law lasted for a decade following its enactment in 2011.

The law set strict spending limits on both defense and nondefense discretionary spending, and those limits could only be raised by bipartisan legislation. 

Republicans backed raising those caps to avoid what they referred to as austere limits on defense funding while Democrats came to the table to negotiate increases to the domestic spending cap. Debt limit talks often rode along with those spending cap increases. 

Biden: ‘I’m not being a wise guy’

Biden praised Schumer, McConnell and House Minority Leader Hakeem Jeffries, a New York Democrat following the Tuesday meeting, but mentioned that McCarthy occasionally made “a little bit of an assertion that maybe was a little over the top” during the meeting.

As far as whether he can trust any agreements McCarthy makes on behalf of House Republicans, Biden indicated the California Republican could have some challenges with his conference if a debt limit deal is struck. 

“I trust Kevin will try to do what he says,” Biden said. “I don’t know how much leeway Kevin McCarthy thinks he has … I’m not being a wise guy, when I say 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.”

Biden maintained he remained confident the country wouldn’t default on its debts. 

“I’m absolutely certain because you have… an overwhelming number of the members of Congress know it would be a disaster.”

When asked about using the 14th Amendment to bypass Congress and raise the debt ceiling unilaterally, Biden said: “The problem is, it would have to be litigated, and in the meantime without an extension, the (situation) would still end up in the same place.”

Biden said he has been “considering the 14th Amendment,” which deals in part with the U.S. debt, with respect to the debt limit.

He added once he’s past this debt limit debate, he wants to take a look “months down the road” at what a court would say on whether a president can use those provisions to address the debt ceiling without action by Congress.