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WASHINGTON -- House Speaker Kevin McCarthy said Tuesday after meeting with President Joe Biden and congressional leaders that he "didn't see any new movement" toward ending a months-long impasse over raising the nation's borrowing limit and averting a potential first-ever U.S. default.
The president welcomed House Speaker Kevin McCarthy, House Democratic leader Hakeem Jeffries, Senate Majority Leader Chuck Schumer and Minority Leader Mitch McConnell in the Oval Office. Their initial challenge was simply to agree on what exactly they were talking about as they met for just over one hour.
With the government at risk of being unable to meet its obligations as soon as June 1, raising the specter of economic chaos, Republicans came to the White House hoping to negotiate sweeping cuts to federal spending in exchange for allowing new borrowing to avoid default.
"I asked the president this simple question, Does he not believe there's any place we could find savings," McCarthy told reporters outside the White House. "All I'm asking is that we spend the amount of money we spent five months ago."
Biden, on the other hand, reinforced his opposition to allowing the country's full faith and credit to be held "hostage" to negotiations -- while affirming his willingness to hold talks on the budget only after default is no longer a threat.
In brief remarks before substantive discussions began, Biden quipped to reporters, "We're going to get started, solve all the world's problems."
There seemed to be at least a bit of daylight between McConnell, who has let his House counterpart take the lead in negotiations and backed him up ahead of the White House meeting, and McCarthy.
The Senate leader categorically said, "The United States is not going to default. It never has and it never will." The speaker, though, simply said, "I've done everything in my power to make sure we will not default."
Democrats said there is room to "come together" on spending cuts as part of the budget process, but quickly jumped on McCarthy's refusal to categorically rule out the possibility of default, with Schumer saying the Republican is "greatly endangering America."
"To use the risk of default, with all the dangers that has for the American people as a hostage and say it's my way or no way, are mostly my way or no way, is dangerous," Schumer said.
McCarthy said Biden had directed their staffs to continue discussions, and that the leaders would convene again in person on Friday.
Before the White House meeting, both McCarthy and White House press secretary Karine Jean-Pierre insisted it would be simple to avert default -- if only the other side capitulated. The chasm between these opposite postures is fomenting uncertainty that is roiling financial markets and threatens to turn into a tidal wave that swamps the country's economy. The meeting was timed to begin after U.S. financial markets closed for the day.
McCarthy said Tuesday that a federal debt deal is needed by next week if Washington is to meet the June 1 deadline, and he said he saw no reason why both sides couldn't come to an agreement quickly over Republican ideas for cutting spending in exchange for raising the debt limit.
"I don't think it's that difficult," McCarthy told reporters at the U.S. Capitol.
Biden and the Democrats don't see it that way. The president is insisting that raising the debt limit is nonnegotiable, with spending restraints addressed separately as part of the annual budget process.
House Republicans recently passed a sweeping bill to slash spending, an opening offer in negotiations. But that legislation has no chance in the Democratic Senate and the White House has threatened to veto it.
Referring to the House bill, McCarthy said, "We both said default is not an option -- but only one of us took action."
Expectations for a breakthrough on Tuesday were low.
Default, officials say, would have sweeping impacts, threatening to disrupt Social Security payments to retirees, destabilize global markets and tilt the nation into a potentially debilitating recession.
Treasury Secretary Janet Yellen acknowledged the "very big gap" between Democrats and Republicans in an interview Monday with CNBC. Biden, she said, was not willing to discuss compromises with "a gun to the head of the American people and the American economy."
Already looking past the meeting, Biden on Wednesday is to go to Westchester County, New York, where he plans to deliver a speech on how proposed spending cuts approved by House Republicans could hurt teachers, older adults needing food aid and veterans seeking health care.
It's part of a broader campaign by Biden to try to paint the Republican cuts as draconian. Aides believe that message both strengthens his position in talks with the GOP and boosts his nascent 2024 reelection effort. His Wednesday visit will be to a congressional district won by Biden in 2020, but that is now represented by a Republican, Rep. Mike Lawler.