What to Know in Washington: Biden, McCarthy Vow More Debt Talks

President Joe Biden and congressional Republicans made little tangible progress Tuesday toward averting a first-ever US default, but pledged negotiations on spending that would open the door to a possible agreement.

Congressional and presidential staff will begin crucial budget discussions, while Biden and Speaker Kevin McCarthy (R-Calif.) plan to meet again Friday.

“Over these last few days and weeks, there’s going to be a lot of posturing, politics and gamesmanship and it’s going to continue for a while,” Biden said after the hour-long meeting in the Oval Office with leaders from both parties. But, the president said, he viewed the conversation as “productive.”

Source: Bloomberg

However, warning signs persist. McCarthy — who faces pressure from conservatives to take a hard line in debt limit talks — told reporters there was no headway made on the debt ceiling during the meeting as both sides restated their deeply entrenched positions.

Before Tuesday’s meeting, the speaker dismissed the idea of a short-term debt-limit extension, which could be the most expedient solution. While the White House said an interim deal was also not their plan, Biden told reporters after the meeting he isn’t taking anything off the table.

Biden also downplayed the possibility of using novel executive action to solve the issue. He said that he had considered invoking the 14th Amendment — which guarantees the validity of public debt — but was concerned that federal courts could overturn the maneuver. The president said he currently viewed the issue as something to explore after a debt ceiling deal was reached, rather than if it was not.

Biden also said his staff had not explored the idea for the Treasury Department to mint a trillion-dollar coin that it would deposit with the Federal Reserve to defuse the crisis.

Meanwhile, the the staff talks could open the door to a face-saving solution for both parties. The White House could call it a “separate” budget deal while McCarthy and the GOP could tout it as a victory. Read the full story from Erik Wasson and Josh Wingrove.

More on the Debt Limit

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BIDEN’S AGENDA

• Biden travels to New York’s SUNY Westchester Community College and at 1:30 p.m. plans to give a speech on why Congress should pass a clean debt limit bill as opposed to Republican’s alternative legislation
• Beginning at 5:15 p.m., Biden participates in back-to-back campaign receptions, then arrives back at the White House at 10:20 p.m.

CONGRESS’ SCHEDULE

• The Senate returns at 10 a.m. to vote on nominations for the International Bank for Reconstruction and Development, the Department of Education, the National Archives, and an ambassador at large for global women’s issues
• The House meets at 10 a.m. for morning hour and noon for legislative business to start floor action on Republicans’ immigration package.

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Whitmer’s Sister to Seek NY House Seat Biden Targeting on Debt

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To contact the reporters on this story: Brandon Lee in Washington at blee@bgov.com; Michaela Ross in Washington at mross@bgov.com

To contact the editor responsible for this story: Kayla Sharpe at ksharpe@bloombergindustry.com