Biden 'optimistic' on debt ceiling as White House negotiation with McCarthy underway

the U.S. could start running short of cash to cover its debts, a daunting situation. Treasury Secretary Janet Yellen said in a letter to Congress on Monday “it is highly likely” that Treasury would be unable to pay all the nation’s bills. An unprecedented default would be financially damaging for many Americans and others“We both talked about the need for bipartisan agreement,” Biden said at the start of the meeting.

A budget deal would unlock a separate vote to lift the debt ceiling, now $31 trillion, to allow more borrowing. Treasury Secretary Yellen said Sunday that June 1 is a “hard deadline.” Negotiators for the White House met again for nearly three hours Monday morning with McCarthy’s team at the Capitol ahead of the session at the White House.

McCarthy, R-Calif., told reporters earlier Sunday that the call with Biden was “productive,” and Biden told a press conference before departing from Japan: “I think that we can reach an agreement.” Over the weekend, Biden used his concluding news conference in Hiroshima, Japan, to say he had done his part by agreeing to spending cuts and to warn, “It’s time for Republicans to accept that there is no deal to be made solely, solely, on their partisan terms.”GOP lawmakers have been holding tight to demands for sharper spending cuts with caps on future spending, rejecting the alternatives proposed by the White House that call for reducing deficits in part with new revenue from taxes.

The White House has countered by keeping defense and nondefense spending flat next year, which would save $90 billion in the 2024 budget year and $1 trillion over 10 years.

House Speaker Kevin McCarthy said he had a productive debt ceiling discussion with President Joe Biden late Monday at the White House, but there's no agreement yet as Washington strains to strike a budget compromise.

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