Debt Ceiling 2023: Takeaways From Biden’s Meeting With McCarthy
Written by
Vance Cariaga
Edited by
Nicholas Morine
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
The race to avoid a government default by June 1 appeared to make little progress following a May 10 meeting between President Joe Biden and U.S. House Speaker Kevin McCarthy (R-Calif.), as the two were unable to arrive at a consensus on how to deal with the debt ceiling crisis.
Biden stuck to his demand that Congress raise the debt ceiling unconditionally to prevent a default, The New York Times reported, while McCarthy continued to argue that a higher debt ceiling be accompanied by significant spending cuts. The one thing the two sides did agree on was to meet again later this week.
For now, there doesn’t appear to be much common ground in the negotiations, even though Treasury Secretary Janet Yellen told Congress earlier this month that the U.S. could default on its debt as early as June 1.
Leading Democrats have called for a “clean” bill to raise the debt ceiling, meaning it won’t be tied to any other legislation, the BBC reported. In contrast, the Republican-led House recently passed a bill that would roll back federal programs such as student loan forgiveness while also limiting federal spending in other areas.
There was hope in some quarters that a meeting between Biden and McCarthy — their first in three months — would advance negotiations closer to a compromise both sides could accept. But as The New York Times noted, neither of the parties involved expected a breakthrough, though they did aim to learn more about where both sides draw a line in the sand.
Following the meeting, Biden said he made clear that “default is not an option.” He also said he is “prepared to begin a separate discussion about my budget and spending priorities but not under the threat of default.”
For his part, McCarthy didn’t offer much hope that the two sides are close to an agreement.
“I didn’t see any new movement,” McCarthy told reporters following the meeting, adding that he asked Biden “numerous times” if Democrats could find places in the federal budget to make cuts.
“They wouldn’t give me any,” McCarthy said.
The two sides did agree to have their respective staffs continue to meet for the rest of this week to find common ground on next year’s spending bills, the NYT reported. This could potentially lead to consensus on broader fiscal issues, if not the debt ceiling itself.
Meanwhile, neither side seems interested in passing a short-term debt limit increase to allow more time for negotiations. McCarthy told reporters that Congressional leaders and Biden would need to strike a deal by next week to have the debt ceiling raised by June 1.
More From GOBankingRates
