Biden-McCarthy meeting ends ‘better’ — but with no clear path to deal

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Speaker Kevin McCarthy and President Joe Biden ended their face-to-face meeting on Monday still short of a deal to avoid a U.S. debt default that could come as soon as June 1.

Yet McCarthy described the tone of the meeting “better than any other” discussion, adding that negotiators for both parties will continue working.

"I believe we can still get there. I believe we can get it done," McCarthy said, sounding upbeat for the first time after a weekend of volatile bipartisan talks.

In their first meeting in six days, McCarthy and Biden spoke for more than an hour about remaining sticking points, including looming spending cuts. Now, McCarthy said both he and Biden directed their negotiators — who already met for several hours earlier Monday — to “work through the night” as they race toward a deal before U.S. borrowing power runs out in as soon as 10 days.

“I feel like it was productive in the professionalism, the honesty in one another, and the desire to try to find common ground,” McCarthy said. But when asked about specifics, such as the GOP’s demand for stricter work requirements on social programs, McCarthy said: “There’s nothing agreed to” — illustrating the gaps that still exist.

Top House Democrats, while not in the meeting, later said they’d been told it was a helpful discussion by their party’s negotiators. While House Minority Leader Hakeem Jeffries dismissed GOP demands like funding the border wall, work requirements or a 10-year spending freeze as “unreasonable,” he also acknowledged for the first time that Democrats were “willing to discuss freezing spending at current levels.”

“That's an inherently reasonable position that many in our party might even be uncomfortable with, but President Biden recognizes we're in a divided government situation,” he said.

To get any agreement through both chambers of Congress, GOP leaders have said they must reach a bipartisan fiscal deal this week so there’s enough time for both chambers to pass the measure and send it to Biden's desk to avoid a market-crashing debt breach.

In a closed-door meeting with his leadership team earlier Monday, McCarthy predicted that even if a deal was reached on Monday evening, it may still be impossible to clear it out of the House by Thursday. That’s thanks, in part, to one of his vows from the speaker’s race: GOP members have been promised 72 hours to read the text of any legislation before a vote.

One GOP member of leadership, who spoke on condition of anonymity, told POLITICO: “I’m not making any firm plans this weekend.”

Biden officials, including Treasury Secretary Janet Yellen, have repeatedly warned that the U.S. will run out of cash to pay its obligations as soon as June 1. But there’s little certainty around that exact date — which has frustrated many Republicans, particularly as other economists predict a so-called X-date closer to June 8. And that’s all left a sense of unease around the Capitol, where lawmakers are eager to leave town for a weeklong Memorial Day recess on Thursday afternoon.

Inside the room, McCarthy described the conversation as “professional” and “productive.” Besides McCarthy, the GOP attendees were House Financial Services Chairman Patrick McHenry (R-N.C.), McCarthy chief Dan Meyer and senior McCarthy policy adviser Brittan Specht.

"We’ve had tough meetings, we’ve had difficult meetings, this meeting was productive," said McHenry, who, alongside Rep. Garret Graves (R-La.) has been hunkered down for days in meetings with Ricchetti, Young and Terrell.

Biden’s team, meanwhile, was chief of staff Jeff Zients, Office of Management and Budget director Shalanda Young, senior adviser Steve Ricchetti and Office of Legislative Affairs director Louisa Terrell.

Ahead of the meeting, Biden had been upbeat about negotiations with McCarthy, even acknowledging the need for spending cuts — something the left of his party has been loath to do.

“We’re optimistic we may be able to make some progress because we both agree default’s not really on the table,” Biden said, noting that they’ve both emphasized a bipartisan solution — with no other real option. “We’ve gotta get something done here.”

But Biden had also called for the two parties to look at “tax loopholes” — something McCarthy appeared to rule out as he spoke post-meeting.

"We’re not looking at revenues, and if you think to put some kind of taxes, it would only hurt our economy for one,” McCarthy said, calling it a "stupid thing to do" because it would feed inflation.

Jennifer Haberkorn, Jordain Carney and Nicholas Wu contributed.