US President Joe Biden was feeling positive following early constructive talks with House Speaker Kevin McCarthy with regards a budget compromise ahead of a June 1 “hard” deadline.
Talks in Washington on the debt ceiling to avert a federal default finished on Sunday with the Democratic president talking to the Republican speaker as Biden flew home on Sunday (May 21) on Air Force One from the G7 summit in Japan. As of June 1, the US could start running short of cash to cover its debts, while Treasury Secretary Janet Yellen said in a letter to Congress on Monday that “it is highly likely” that Treasury would not be able to pay all the nation’s bills.
“We both talked about the need for bipartisan agreement,” Biden said at the start of the meeting. The president said he was “optimistic we’re going to make some progress”.
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McCarthy revealed the pair had a “very productive” phone call and feels they can find some ”common ground”, although they did admit they had some disagreements.
The White House chief of staff and top administration negotiators joined the session, as did McCarthy’s own chief of staff as well as a top Republican involved in the negotiations, Patrick McHenry of North Carolina, the Financial Services Committee chairman.
The Republicans are of the firm belief that 2024 spending levels can be no higher than those in 2023, but the Democrats have refused to go along with the steep cuts suggested by McCarthy and his team.
Republicans initially sought to impose spending caps for 10 years, although the latest proposal narrowed that to about six. The White House wants a two-year budget deal.
“I think that we can reach an agreement,” Biden said. “I can’t guarantee that they wouldn’t force a default by doing something outrageous.”
McCarthy, pointing to the House’s spending cuts as the “framework” for a deal, said: “We have to spend less next year than we spent this year. I’m hopeful.”
Negotiators for the White House then met again for nearly three hours, with McCarthy’s team at the Capitol ahead of the session at the White House.
“We’ll keep working,” said counsellor to the president Steve Ricchetti as the White House team left the latest round of talks.
McCarthy, though, continued to blame Biden for having refused to engage earlier on annual federal spending.
McHenry told reporters following the latest three-hour session: “We’re at a very sensitive point and the goal is to get something that can be legislated into law.”
