With a June 1st deadline approaching, the White House has begun to give some concessions to House Republicans on reforms in order to get a debt ceiling agreement in place before a default on U.S. debt could occur.
After saying he would not negotiate, some in his administration characterized ongoing talks as negotiations ahead of a Tuesday night meeting to continue discussions.
“I think the negotiations are very active. I’m told they have found some areas of agreement,” Treasury Secretary Janet Yellen said. Deputy Secretary Wally Adeyemo also called the talks "negotiations."
While Biden had demanded a clean debt ceiling bill, there was mounting pressure on him to negotiate after House Republicans passed a debt ceiling increase linked to spending cuts and rollbacks.
House Speaker Kevin McCarthy (R-CA) indicated he was willing to negotiate but not to give Biden an increase that would allow spending to keep increasing unchecked.
When asked about whether he'd accept tougher work requirements for government aid programs like Medicaid, Biden said, “I voted for tougher aid programs that’s in the law now, but for Medicaid it’s a different story. And so I’m waiting to hear what their exact proposal is.”
Without a debt ceiling increase, the U.S. would have to default on some of its debt payments sometime between June and September.
A default could lead to sky-high interest rates on consumer debt, the inability to borrow money, and higher prices for products.
Basically, it could throw the U.S, into economic turmoil and lead to severe disruptions to Americans' way of life.
Biden and McCarthy had previously been pointing fingers at each other about the impasse, but it became clear that Republicans were willing to work with Biden, putting the onus on him if things became dire.
“It never is good to characterize a negotiation in the middle of a negotiation,” White House spokesperson Michael Kikukama said. “I remain optimistic because I’m a congenital optimist. But I really think there’s a desire on their part, as well as ours, to reach an agreement, and I think we’ll be able to do it.”
Items that still have to be hashed out are the duration of any spending caps, how much unspent Covid money of the $80 billion to bring back into the budget, how a permitting deal would work, how work requirements would work, a how soon we need to do all of this again.
After the planned meeting on Tuesday, Biden expects to be leaving on a week-long trip overseas that coincides with the G-7 summit.
If need be, however, that trip could get cut short so that a deal can be reached for June 1st.
