With time running out to address the debt ceiling or the risk of default, President Joe Biden said Tuesday he would postpone his upcoming foreign trip for “final negotiations.”
Biden was due to leave on Wednesday for a meeting with G-7 leaders in Japan, but will now return on Sunday and will no longer visit Papua New Guinea or Australia.
Biden will become the first US president to visit Papua New Guinea and is scheduled to attend the Quad Summit in Australia. House Speaker Kevin McCarthy and other Republicans have criticized Biden’s plans to travel abroad as lawmakers face a June 1 default deadline.
“As he has done 78 times before, the president has made it clear that bipartisanship and their members of Congress must come together to prevent default. The president and his team can reach a budget deal that continues to work with congressional leadership and the president’s desk,” White House press secretary Karine Jean-Pierre said in a statement. .
Debt ceiling talks resumed Tuesday afternoon when Biden, McCarthy, House Minority Leader Hakeem Jeffries, Senate Majority Leader Chuck Schumer and Senate Minority Leader Mitch McConnell met at the White House.
Speaking later at a White House celebration of Jewish Heritage Month, Biden called it “a good, productive meeting” on the path forward to avoid default.
“There is still work to be done, but I made it clear to the Speaker and others that we will continue to talk over the next couple of days, and the staff is going to continue to meet daily to make sure we stay on track,” the president said. , he cut his trip short “to return for final negotiations”.
McCarthy emerged from the debate saying the two sides were still far apart, but added that a deal could soon be reached within days.
“It’s possible we’ll get a deal by the end of the week,” McCarthy told ABC News’ senior congressional correspondent Rachel Scott outside the White House. “It’s not that hard to come to an agreement.”
What changed at Tuesday’s meeting, McCarthy said, was how the parties move forward. Instead of negotiations between four congressional leaders, Biden agreed to appoint two top members of his staff to work directly with McCarthy and his staff.
“The structure has changed, so we’re in a better process,” McCarthy said.
After the meeting, Schumer told reporters that leaders agreed to “pass a bipartisan bill in both chambers with bipartisan support.”
“Default is the worst, worst alternative and having a bipartisan bill in both parties is the only way we’re going to avoid default,” the Democratic Senate leader said.
Adding to the pressure ahead of Tuesday’s debt ceiling summit, Treasury Secretary Janet Yellen said the economic shock from an unprecedented default would “lead to a recession.”
“This is a necessary congressional action as soon as possible,” he said as he delivered remarks in downtown Washington, adding that they were already seeing the “impacts of brinkmanship” and that “default would create an economic disaster.”
Although the exact date is uncertain, Yellen has repeatedly warned that the U.S. could default as early as June, perhaps as early as June 1.
Yellen wrote to McCarthy on Monday that the Treasury already sees negative impacts on the economy as negotiations continue — including increased borrowing costs — and that more harm could result if lawmakers wait until the final hours to strike a deal.
Biden and Democrats have urged Republicans to take default off the table and separate the debt ceiling from the 2024 budget. Republicans, on the other hand, said they did their job by passing the Limit, Save, Grow Act last month to raise the debt ceiling and make deep spending cuts.
Possible areas of agreement for budget talks to emerge from the last debt ceiling meeting between the so-called “Big Five” include returning billions of dollars in unspent COVID-19 relief and reforming the permitting process for energy projects — a GOP priority — sources familiar with the talks told ABC News. reported.
“It shouldn’t be too difficult,” McConnell said after Tuesday’s meeting. “No. 1, we know we’re not going to default. They know it, we know it. We’re running out of time.”
