Congressional leaders return to the White House Tuesday for a second summit on raising the debt ceiling so the government can pay its bills.
While President Biden says both sides want to reach an agreement, House Speaker Kevin McCarthy (R-CA) says he doesn’t see any progress.
But Biden was optimistic, saying over the weekend, “There’s a desire on their part as well as ours to reach an agreement.”
It’s the second time in a week that Biden has met with McCarthy of California and other congressional leaders at the White House. Biden is confronting a politically divided Congress for the first time on the debt ceiling, a test for both the president and McCarthy, the new speaker, as they work to stave off an economic crisis that could come from a federal default. The meeting will also include Senate Majority Leader Chuck Schumer (D-NY), Senate Minority Leader Mitch McConnell (R-KY), and House Democratic Leader Hakeem Jeffries (D-NY).
Talks have been underway at the Capitol for much of the past week, closed-door discussions where White House and congressional staff are discussing what it would take to craft a budget deal that would unlock a separate vote to lift the nation’s borrowing capacity.
The national debt stands at $31 trillion.
One item on the table — reclaiming $30 billion in unspent funds dedicated to COVID relief.
Meanwhile, the June 1 deadline to raise the ceiling is approaching.
Treasury Secretary Janet Yellen warns that even a last-minute deal could harm consumer confidence and threaten the government’s credit rating.
But Yellen, in a letter to the House and Senate, left some opening for a possible time extension on a national default, stating that “the actual date Treasury exhausts extraordinary measures could be a number of days or weeks later than these estimates.”
She said she would update Congress next week “as more information becomes available.”
However, time is dwindling. Congress has just a few days when both the House and Senate are in session to pass legislation.
An increase in the debt limit would not authorize new federal spending. It would only allow for borrowing to pay for what Congress has already approved.
As June 1 approaches, the nonpartisan Congressional Budget Office has warned of a “significant risk” of default sometime in the first two weeks of next month.
The CBO noted that if the cash flow at the Treasury and the “extraordinary measures” that the department is now using can continue to pay for bills through June 15, the government can probably finance its operations through the end of July. That’s because the expected tax revenues that will come in mid-June and other measures will give the federal government enough cash for at least a few more weeks.
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