The White House and Republicans are fighting to make progress on the debt ceiling talks

The White House and congressional Republicans struggled to make meaningful progress on a deal to raise the U.S. borrowing limit on Tuesday, putting the economy and financial markets on edge just over a week before a possible debt default.

President Joe Biden and Republican House Speaker Kevin McCarthy met Monday night at the White House for face-to-face talks that both described as “productive” and raised hopes of moving closer to a deal.

However, staff-level talks late Monday and Tuesday showed no signs of a breakthrough, only promises to continue talks.

“While there are still disagreements, the president, the speaker and their teams will continue to discuss the way forward,” White House press secretary Karine Jean-Pierre said at a Tuesday briefing.

Earlier on Tuesday, McCarthy held a closed-door meeting with Republican lawmakers in the lower house of Congress in which he said he was “nowhere close” to a deal with Biden.

“There are certain things that divide us. . . You can’t spend more money next year than you spent this year, clear as day. We have to help people get to work with the demands of the job,” McCarthy later told reporters.

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Garret Graves, a Republican member of the House of Representatives who was selected by McCarthy as a key negotiator, later called on the White House to “empower” administration officials acting on behalf of Biden, accusing them of acting like used-car salesmen and saying that before him they need to talk to their manager. refuses to negotiate the price.

Graves told reporters on Capitol Hill that he does not expect the two sides to meet again on Tuesday.

The lack of tangible movement toward a deal will become increasingly alarming as the US Treasury warned it could run out of cash to pay all its bills on June 1. Such an event could potentially cause massive disruption to the financial system. , and reached households and businesses across the United States.

Any deal would have to be struck days before the deadline to give both houses of Congress time to pass the legislation and send it to Biden for his signature.

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The biggest sticking point is the division over where discretionary spending levels should be set in the coming years. Although the White House has proposed freezing spending levels for the next fiscal year, Republicans want aggressive spending cuts before they start rising again for an extended period of time.

“Are they just now coming up with the idea of ​​freezing?” McCarthy said.

The two sides also argued over adding new work requirements to social safety net programs. As the talks drag on, Democrats have grown impatient, suggesting that Biden should find a way to unilaterally avoid defaulting on constitutional grounds, even if doing so would be legally risky.

“As I’ve said from the beginning, McCarthy is too weak a speaker and the MAGA caucus is too Trump-driven to make any reasonable deal,” Sen. Chris Van Hollen, D-Maryland, tweeted Tuesday, referring to the former president’s Make America Great Again slogan. .

But McCarthy insisted a deal was still possible. “I think we’re still going to get there and we’re going to get there before June 1.”

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Andy Barr, Republican of Kentucky on the House Financial Services Committee, said Biden should be “more serious” about the negotiations.

The White House must continue to “recognize” that putting the United States on a “more sustainable fiscal path” is necessary to protect the country’s “full faith and credit” — while “avoiding default in the short term” is only part of the answer, Barr added. .

“That realization has to happen pretty quickly on the other side of the aisle,” he said.