WASHINGTON (AP) 鈥� President Joe Biden and congressional Republicans are still far from resolving the , but a deal is still possible by the end of the week, GOP House Speaker Kevin McCarthy declared after an Oval Office meeting Tuesday with Biden and other Democratic leaders.
Meanwhile, Biden is because of the urgency of the talks. He will still attend a Group of Seven summit in Japan this week but will then hurry home rather than going to Australia and Papua New Guinea as planned.
For all the talk of a dire debt-limit outcome, there was overriding agreement after the White House meeting that the first default in U.S. history must be averted.
鈥淣umber one, we know we鈥檙e not going to default,鈥� said Republican Senate leader Mitch McConnell. But he added: 鈥淲e鈥檙e running out of time.鈥�
Said Democratic Senate Majority Leader Chuck Schumer: 鈥淗opefully we can come to an agreement. ... Default is just the worst, worst alternative."
McCarthy said one important development from the meeting was that the president had 鈥渃hanged the scope鈥� of who is negotiating in the staff conversations that have been slow-going over the past week.
Now, Steve Ricchetti, counselor to the president, and Shalanda Young, the director of the Office of Management and Budget, will try to negotiate an agreement directly with McCarthy鈥檚 team. The speaker said he tasked Rep. Garrett Graves, R-La., point man for the speaker on debt and budget, for the talks with the White House team.
鈥淣ow we have a format, a structure,鈥� McCarthy said as he returned to the Capitol. A White House readout of the meeting said Biden was directing his staff to 鈥渃ontinue to meet daily on outstanding issues鈥� in the talks and that he would check in later this week with leaders by phone.
Tuesday's meeting was pivotal as negotiators are staring down a June 1 deadline, which is when the Treasury Department says the U.S. could begin defaulting on its debts for the first time in history.
Biden is to leave Wednesday for Japan but will cancel the later stops, the White House said.
National Security Council spokesman John Kirby said Biden will already have met with some of the leaders of the so-called 鈥淨uad鈥� 鈥� the purpose of the Australia leg of the visit 鈥� while in Japan.
鈥淲e wouldn鈥檛 even be having this discussion about the effect of the debt ceiling debate on the trip, if Congress would do its job, raise the debt ceiling the way they鈥檝e always done,鈥� Kirby said.
Biden seemed upbeat that 鈥渨e'll be able to do this鈥� as the White House meeting began. Others in the Oval Office 鈥� Vice President Kamala Harris, McCarthy, Schumer, McConnell and House Minority Leader Hakeem Jeffries 鈥� sat soberly.
McCarthy has been far more pessimistic than Biden on the state of the talks. He and other Republicans are demanding big budget cuts in exchange for their support for raising the debt ceiling. Biden insists the two issue must not be linked.
鈥淗ow much is too much?" McCarthy said about the nation's $31 trillion debt load, as he pushed for stricter work requirements on government aid recipients as a way to cut spending.
Even as the Democratic president and the Republican speaker box around the politics of the issue 鈥� with Biden insisting he鈥檚 not negotiating over the debt ceiling and McCarthy working to extract spending cuts 鈥� various areas of possible agreement appeared to be emerging.
Among the items on the table: clawing back some $30 billion in untapped COVID-19 money, imposing future budget caps, changing permit regulations to ease energy development and putting bolstered work requirements on recipients of government aid, according to those familiar with the talks.
But congressional Democrats are growing concerned about the idea of putting new work requirements for government aid recipients after Biden suggested he may be open to such changes. The White House remains opposed to changes in requirements for recipients of Medicaid and food stamp programs, although it is more open to revisions for beneficiaries of the Temporary Assistance for Needy Families cash assistance program.
The idea of imposing more work requirements was 鈥渞esoundingly鈥� rejected by House Democrats at a morning caucus meeting, according to one Democrat at the private meeting and granted anonymity to discuss it.
Progressive lawmakers in particular have raised the issue. Rep. Pramila Jayapal, the chair of the Congressional Progressive Caucus, said, 鈥淲e want to make sure that these negotiations do not include spending cuts, do not include work requirements, things that would harm people, people in rural areas, black, brown, indigenous folks.鈥�
Democratic leader Jeffries' staff sought to assuage the concerns late Monday, while a separate group of more centrist Democrats have signaled to their moderate Republican colleagues they are prepared to work something out to reach a debt ceiling deal, aides said Tuesday.
While McCarthy has complained the talks are slow-going, saying he first met with Biden more than 100 days ago Biden has said it took McCarthy all this time to put forward his own proposal after Republicans failed to produce their own budget this year.
Compounding pressure on Washington to strike a deal, Treasury Secretary Janet Yellen said Monday that estimates are unchanged on the possible 鈥淴-date鈥� when the U.S. could run out of cash.
But Yellen, in a letter to the House and Senate, left some opening for a possible time extension on a national default, stating that 鈥渢he actual date Treasury exhausts extraordinary measures could be a number of days or weeks later than these estimates.鈥�
鈥淚t is essential that Congress act as soon as possible,鈥� Yellen said Tuesday in remarks before the Independent Community Bankers of America.
"In my assessment 鈥� and that of economists across the board 鈥� a U.S. default would generate an economic and financial catastrophe," she said.
Time is dwindling. Congress has just a few days when both the House and Senate are in session to pass legislation.
鈥淚t鈥檚 time for the principals to get more engaged, get their closers out there,鈥� said Sen. John Thune of South Dakota, the Republican whip.
Details of a potential budget deal remain politically daunting, and it鈥檚 not at all clear they go far enough to satisfy McCarthy鈥檚 hard-right faction in the House or would be acceptable to a sizable number of Democrats whose votes would almost certainly be needed to secure any final deal.
Republicans led by McCarthy want Biden to accept their proposal to roll back spending, cap future outlays and make other policy changes in . McCarthy says the House is the only chamber that has taken action to raise the debt ceiling. But the House bill is almost certain to fail in the Senate, controlled by Democrats, and Biden has said he would veto it.
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.
___ Associated Press writers Fatima Hussein and Kevin Freking contributed to this report.
Lisa Mascaro And Seung Min Kim, The Associated Press
