(CNN) — President Joe Biden is set to meet with congressional leadership on Tuesday amid a stalemate in Washington to raise the debt ceiling and avoid a default that would have catastrophic economic consequences.
A path forward to raising the debt ceiling remains unclear. House Republicans want to attach spending reductions to a debt ceiling increase and have passed a debt limit plan that does just that. But Biden and congressional Democrats are insisting on passing a clean increase on the debt limit before addressing a framework for spending.
During Tuesday’s meeting in the Oval Office at 4 p.m. ET — the first in-person, top-level discussions to take place at the White House in months — the president will be joined by House Speaker Kevin McCarthy, House Minority Leader Hakeem Jeffries, Senate Majority Leader Chuck Schumer and Senate Minority Leader Mitch McConnell.
It remains to be seen whether the parties involved will agree to establishing a process for earnest negotiations.
Biden has not formally held a meeting with McCarthy since February, when the two last discussed the debt ceiling at the White House.
McCarthy on Tuesday signaled opposition to a short-term debt limit lift, telling reporters just hours before the White House meeting, “Let’s just get this done now.”
“It’s the same message I gave him 97 days ago. Why don’t we sit down and work this all out? He said he would meet with us and he ignored us for 97 days,” McCarthy told CNN.
“Why continue to kick the can down the road?” he asked.
He also said that Congress will need deal in principle to lift debt limit by next week.
Heading into Tuesday’s meeting, McCarthy has more leverage than many expected him to haveand House Republicans remain largely behind him.
“There isn’t a single bright line or ‘must have’ that I am married to,” South Dakota GOP Rep. Dusty Johnson, a key McCarthy ally, told CNN. “The totality of the deal has to make real and substantial change to how our country spends and borrows. There are lots of different ways to get there.”
Many House Republicans believe the speaker has built trust within their ranks over the last several months — a testament, they say, to a leader who barely clinched the speakership after a historic 15 rounds of voting.
A source close to McCarthy said the speaker — after months of listening sessions and meetings — feels comfortable with where his conference’s hard lines and negotiable provisions lie. He’s spent the last several days touching base with Republican members across the ideological spectrum and speaking with Louisiana GOP Rep. Garret Graves, who he selected to take lead as a policy adviser on this issue.
Asked what would be a victory in negotiations with the White House, North Dakota Republican Rep. Kelly Armstrong said, “Kevin getting us the best deal he can after the White House engages in good faith negotiations.”
“I recognize what I want and what can get 60 votes in the Senate may not be the same,” he added.
McConnell — known as a Senate deal maker with stronger ties to Biden than McCarthy — has signaled that he won’t come to rescue Democrats in negotiations, telling the president privately that it was up to him and McCarthy to come to an agreement, according to Bloomberg. McConnell told the news outlet on Monday, “The White House and the speaker’s teams need to sit down now and settle it.”
Ahead of Tuesday’s meeting, McConnell reiterated that he backs McCarthy in tying spending negotiations to the debt ceiling. He also called on the president to negotiate, saying that if the nation defaults it will be “an economic disaster of his own creation.”
In the Senate, all but six Senate Republicans have vowed to oppose raising the debt ceiling “without substantive spending and budget reforms,” backing McCarthy’s position.
Meanwhile, the White House continues to maintain that Biden will not change course in his belief that Congress must do its job by raising the debt limit without conditions to avoid a catastrophic default and is determined to hold the line on demanding a clean debt ceiling increase, White House officials say.
Biden’s goal, officials say, is to move spending negotiations onto a separate track, removing the threat of default while giving Republicans assurances he will engage in good-faith negotiations about federal spending. He also plans to ramp up public pressure on Republicans, traveling to New York on Wednesday to take aim at one of the 18 House Republicans hailing from districts Biden won in 2020.
“It’s Congress’ constitutional duty to act to prevent default. That’s what the president’s going to be very clear about,” White House press secretary Karine Jean-Pierre told reporters during Monday’s press briefing.
Jean-Pierre repeatedly refrained from setting certain expectations for Tuesday’s meeting, at one point telling a reporter on Monday, “I wouldn’t call it debt ceiling negotiations. I would call it a conversation between the four leaders and the president.”
The US hit the debt ceiling set by Congress in January. That forced the Treasury Department to begin taking extraordinary measures to keep the government paying its bills. And Treasury Secretary Janet Yellen recently warned that the US could default on its obligations as soon as June 1 if Congress doesn’t address the debt limit.
A breach of the US debt ceiling risks sparking a 2008-style economic catastrophe that wipes out millions of jobs and sets America back for generations, Moody’s Analytics has warned. The impact could include delayed Social Security payments, late paychecks for federal employees and veterans and a direct hit to Americans’ investments.
Stocks fell Tuesday morning as investors awaited updates on the debt ceiling and inflation.
Along with news about the White House, investors are also bracing for the April Consumer Price Index data due on Wednesday, which could give more clues into the Federal Reserve’s planned trajectory in its fight against inflation.
This story and headline have been updated with additional developments.
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