Biden expresses confidence in debt ceiling deal, but a deal remains elusive

President Biden and congressional leaders will resume face-to-face talks on Tuesday, expressing cautious optimism as the White House begins to focus on the contours of a potential deal to avoid a government default.

As the agreement to raise the debt ceiling has been finalized, a wide range of negotiations have emerged, including permanent limits on federal spending, the return of unspent funds earmarked for the Covid-19 emergency, tougher work requirements for federal benefits and accelerated approval rules. Energy projects.

“I am optimistic because I am a born optimist,” said Mr. Biden told reporters Sunday in Rehoboth Beach, Del. He added, “I think they and we have a desire to reach an agreement. I think we can do that.

However, on Monday, Speaker Kevin McCarthy said the two sides were “at a distance”.

The Treasury Department has warned that the U.S. could not pay its bills by June 1 unless it raises the debt ceiling, which limits how much the country can borrow. That $31.4 trillion threshold was hit on Jan. 19, and the Treasury Department is using accounting tricks to pay America’s bills.

Republicans have said they want to cut federal spending before raising the cap, but Mr. Biden said talks on cuts should not be a condition for raising the cap and avoiding a catastrophic default.

Economists on Wall Street and in the White House say a prolonged default could destroy jobs and push the country into recession.

Mr. is leaving for Japan on Wednesday to attend the Group 7 meeting. Biden said Tuesday that Mr. He confirmed on Monday that he would meet with McCarthy.

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The two sides met face-to-face at the White House last Tuesday, but it ended without a deal. They were scheduled to meet again last Thursday, but that session was postponed to give staff more time to elaborate.

People familiar with the negotiations saw the decision to postpone the meeting as a positive development that would give employees more time to move forward.

“Discussions have been constructive between all parties,” said Deputy Treasury Secretary Wally Adeyemo.

“America has never paid back its debt, and we can’t,” said Mr. Adeyemo said. “Because paying off our debt is not about the financial markets. It’s about paying our Social Security recipients, paying our military, paying the men and women working on the border today.

Biden administration officials have said they will not accept any of the president’s signed legislative achievements, particularly any deal on climate change. They want Republicans to drop some provisions in the debt ceiling bill that passed the House last month.

That measure died on its way to the Democratic-led Senate, but the details are a signal of Republicans’ negotiating position with the White House.

The bill would make people who receive both federal food assistance and Medicare benefits without dependents subject to work requirements until they are 55, up from the current age of 49. It also seeks to close a loophole that Republicans say has been abused. States allow officials to exempt food assistance recipients from work requirements.

Asked if he was prepared for the tough work requirements of aid projects, Mr. Biden said over the weekend that the senator voted for similar measures, “but it’s a different story for Medicaid.”

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White House Press Secretary Michael Kikugawa said Mr. Biden said he has been “clear that he will not support proposals that take away people’s health insurance.”

“He will not accept policies that drive Americans into poverty,” Mr. Kikugawa said.

Conservatives initially proposed making those work requirements even tighter, but key Republicans in contested districts blocked that.

Katie Edmondson Contributed report.

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