What to Know in Washington: Biden Sets Debt-Limit Meeting

President Joe Biden invited top congressional leaders to a May 9 meeting on the debt limit as the US barrels closer to a potential default that the Treasury Department warned yesterday could come sooner than anticipated.

The proposed meeting is the first sign of progress in what has become a high-stakes game of chicken in Washington, with nothing short of the full faith and credit of the US hanging in the balance. The White House has said it would not negotiate with Republicans over extending the debt ceiling, while Speaker Kevin McCarthy (R-Calif.) has vowed not to extend the limit without corresponding cuts to the federal budget.

Photographer: Al Drago/Bloomberg

McCarthy agreed to attend the May 9 meeting after a speaking with Biden, a GOP aide said today. Senate Minority Leader Mitch McConnell (R-Ky.) has yet to confirm his plans. A White House official emphasized that the invitation shouldn’t be interpreted as Biden relenting from his refusal to negotiate over the debt ceiling.

The drama played out against a dire warning from Treasury Secretary Janet Yellen, who told told lawmakers yesterday that her department’s ability to use special accounting maneuvers to stay within the federal debt limit could be exhausted as soon as the start of June.

Read More: Yellen Warns Congress Treasury May Run Out of Cash Soon as June

Biden plans to use the high-profile White House meeting to press Republicans to raise the debt limit without conditions and express willingness to discuss spending cuts separately in negotiations on the federal budget, the White House official said.

McCarthy, whose calls for a meeting with Biden escalated after House Republicans passed their debt plan last week, has said his party would not increase the spending limit without cuts to the federal budget.

The House is on break until next week and both chambers are scheduled to take a different week-long recess later this month. Additionally, Biden is scheduled to travel to Japan and Australia later this month. That leaves very few days when all parties are scheduled to be in Washington before June 1, adding to the urgency of next week’s meeting.

The House could push a deal through relatively quickly, if lawmakers had the political will and the votes to do so. Yet the Senate still must overcome filibuster threats and it can take several days to pass any legislation.

The tight deadline increases the chances that Congress passes a short-term increase to buy time while budget talks continue, although several Republicans scoffed at the idea yesterday.

Schumer started the process yesterday for the Senate to consider a two-year debt limit suspension as well as the House-passed Republican debt bill. The House bill, which Democrats oppose, would be available to be amended with a future bipartisan deal on the budget after a clean debt limit passes, a Schumer spokesperson said. Read more from Steven T. Dennis and Erik Wasson.

BIDEN’S AGENDA

• The president has no public events scheduled.
• White House Press Secretary Karine Jean-Pierre holds a briefing at 1 p.m.

CONGRESS’ SCHEDULE

• The Senate meets at 10 a.m. to vote on three judicial nominees.

More From Congress

• IRA Repeal: Sen. Joe Manchin (D-W.Va.) said he would push to repeal parts of the Inflation Reduction Act that he claims could raise the national debt—even though the centrist senator played a key role in the IRA being signed into law by Biden last year. Read more

• Permitting Push: Manchin, meanwhile, is attempting to accelerate federal permitting for energy projects, including one in his home state of West Virginia, renewing the effort he failed to shepherd through the Senate last year. Read more

• Drug Middlemen: Lawmakers are ramping up their fight to lower drug costs by focusing on a handful of bills likely to secure strong, bipartisan support, including limits on fees from the entities that manage pharmaceutical coverage and legislation to encourage generic drug approvals. Read more

• Rural Hospitals: House Republicans are looking to lower Medicare and Medicaid payments to hospitals for certain services to what doctor’s offices and outpatient laboratories are usually paid—proposals with some bipartisan support. But lawmakers from rural areas are worried. Read more

• Housing Nonprofits: Recent high-profile court decisions favoring nonprofits in disputes over who can buy Low-Income Housing Tax Credit properties after all the tax credits have been collected aren’t enough to fix the issue, affordable housing advocates are telling Congress. Read more

• Judicial Confirmation: Anthony Johnstone, a Montana law professor and one of Biden’s few judicial nominees from a conservative-led state, was confirmed to the nation’s largest appeals court. Read more

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

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