Biden and McCarthy had a 'productive' meeting but still can't agree on a debt ceiling solution with a default as soon as 10 days away

President Joe Biden and Speaker of the House Kevin McCarthy
U.S. Speaker of the House Kevin McCarthy (R-CA) and President Joe Biden meet with other lawmakers in the Oval Office of the White House on May 09, 2023 in Washington, DC.Anna Moneymaker/Getty Images
  • Biden and McCarthy met on Monday to discuss the debt ceiling, and they still haven't reached an agreement.

  • This comes as soon as ten days before the US could default on its debt.

  • Despite pressure from some Democrats, Biden is still hesitant to bypass Congress to address the debt ceiling.

Every day that passes is a day closer to economic catastrophe in the US — and President Joe Biden and Speaker of the House Kevin McCarthy still can't agree on a way to avoid that outcome.

On Monday, Biden and McCarthy met to attempt to come to an agreement on raising the debt ceiling before the US defaults on its debt, which Treasury Secretary Janet Yellen said could happen as soon as June 1. This meeting came after negotiations were stalled on Friday because GOP negotiators were branding the White House's debt ceiling requests as "unreasonable," and it appeared that both sides were unwilling to budge on their debt ceiling demands.

And emerging from the Monday meeting, McCarthy told reporters it was a "productive" meeting — but the two sides did not reach a deal.

"I think the tone tonight was better than any other time we've had discussions," McCarthy said following the meeting.

"I think we both agree that we want to be able to come to an agreement," McCarthy added. "We both agree on the areas that we know there's disagreement on, but I think it was productive and the professionalism, the honesty with one another, and the desire to fight try to find common ground."

Notably, House Minority Leader Hakeem Jeffries told reporters following the meeting that Democrats are "willing to discuss freezing spending at current levels. That's an inherently reasonable position many in our party might even be uncomfortable with, but President Biden recognizes we're in a divided government situation."

This minimal progress comes at a critical time for the US economy. According to Moody's Analytics, even a short-term default could cost Americans nearly a million jobs, and an analysis from the Joint Economic Committee previously found a failure to raise the debt ceiling could cost Americans $20,000 in retirement savings, along with a surge in mortgage and private student-loan payments.

Lawmakers on both sides of the aisle have been adamant that the US cannot default on its debt — but the legislative process takes time, and Congress will need to move quickly to pass a bill before June in the event of an agreement.

"It's time for Republicans to accept that there is no bipartisan deal to be made solely on their partisan terms. They have to move as well," Biden said during a Sunday press conference in Japan. "All four congressional leaders agree with me that default is not an option. And I expect each of these leaders to live up to that commitment. America has never defaulted on our debt, and it never will."

And if Congress can't reach an agreement, a growing number of Democratic lawmakers have been urging Biden to prepare to invoke a clause in the 14th Amendment that would declare the debt ceiling unconstitutional, allowing the president to bypass Congress and get rid of the debate forever. Still, while Biden acknowledged that he thinks he "has the authority" to take that route on Sunday, he expressed hesitancy given potential litigation that could result.

So at this point, it's unclear where negotiations will go from here — and if Congress can reach a deal in time to save Americans from an unprecedented default on the nation's debt.

Read the original article on Business Insider