President Joe Biden and House Speaker Kevin McCarthy postponed their meeting on the debt ceiling set for Friday as their aides continue negotiations toward avoiding a catastrophic US default.
(Bloomberg) — President Joe Biden and House Speaker Kevin McCarthy postponed their meeting on the debt ceiling set for Friday as their aides continue negotiations toward avoiding a catastrophic US default.
The delay signals that staff-level talks on energy permitting reform and government spending have yielded progress, according to people familiar with the talks. The speaker said Biden planned to meet with him and other congressional leaders next week, though neither side specified a date.
McCarthy told reporters at the Capitol that the leaders agreed it would be “more productive” for staff to proceed with their discussions. Senate Majority Leader Chuck Schumer, likewise, said he believed talks “are moving along.”
White House congressional liaison Louisa Terrell met behind closed doors with McCarthy chief of staff Dan Meyer and other aides for more than two hours Thursday afternoon.
Yet even as both sides touted progress in private talks, McCarthy — who must pacify restive conservatives who demand deep budget cuts — sharply criticized Democrats.
“President Biden and Senator Schumer are stuck on ‘no.’ They have no plan, no proposed savings and no clue,” McCarthy told reporters as news of the meeting delay broke. “Apparently, President Biden doesn’t want to deal. He wants to default.”
McCarthy said one of the leaders had to attend a funeral on Friday and that, “combined with the lack of progress and seriousness on the part of the White House,” led to the postponement. He added, however, that it didn’t mean the talks had fallen apart.
The Treasury Department has warned that the US could default on payments as soon as June 1 if lawmakers are unable to strike an agreement to raise the debt ceiling. Doing so would reverberate throughout the economy, economists have warned, projecting increased credit costs and unemployment.
Yields on bills that mature in early June were unchanged after the announcement, which came after equity markets closed in the US. Yields on 10-year US Treasuries were also little changed.
Staff level talks have been underway between both sides on government spending, following the Tuesday meeting between Biden, McCarthy and other congressional leaders. An agreement on spending could clear the way for a deal to raise the US borrowing limit.
The spending discussions are also focusing on clawing back unspent Covid-19 funds and capping spending in the upcoming federal fiscal year beginning Oct. 1, said Representative Garret Graves, a Louisiana Republican. The White House wants a short-term caps deal, while Republicans want to cap discretionary spending for 10 years, he added.
Graves, a key adviser to McCarthy in the negotiations, said chances are “better than 50/50” that a deal will include some agreement on an overhaul on energy project permits.
–With assistance from Steven T. Dennis.
(Updates with a leader attending funeral on Friday, in paragraph.)
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