Meeting Between Biden and Republicans Delayed as Sides Pursue Debt Limit Deal

A White House press secretary said Thursday that President Biden and congressional leaders have agreed to postpone the next round of debt-straightening talks, scheduled for Friday, until next week.

The decision to postpone the top-level meeting was described by people familiar with the decision as a “positive development,” allowing staff more time to work toward an agreement before Biden and congressional leaders meet again. said it would.

The delay comes at a time when the United States is inching closer to defaulting on its debt. Treasury Secretary Janet L. Yellen warned the government could run out of cash to pay all bills as early as June 1.

The scramble to find a solution begins less than a week before Mr. Biden is scheduled to travel to Japan for the G7 summit. Yellen is using an accounting ploy to delay a default, but she is in Japan this week for a meeting of G7 finance ministers, and on Thursday there will be dire economic consequences if the US doesn’t pay its bills on time. warned that it would occur.

“A default would threaten the progress we’ve made over the past few years as we worked hard to recover from the pandemic,” Yellen said. “And that would trigger a global recession that would set us back even further.”

“It would also risk undermining America’s global economic leadership and would raise questions about its ability to defend its national security interests,” it added.

Biden and congressional Republican leaders have long been at odds, but they appear to be working toward a compromise to raise the national debt ceiling. That includes efforts to cut federal discretionary spending next year, and likely beyond.

Administration officials have so far rejected any deal with McCarthy that would roll back Biden’s signature legislative achievements, particularly on climate change. They are calling for Republicans to remove key provisions of the debt ceiling bill that passed the House of Representatives last month, including removing most of Biden’s tax incentives for clean energy and banning fossil fuel development. It also includes a range of new incentives.

On the narrower issue of discretionary spending, administration officials are calling for a much smaller cut than House Republicans approved last month. They want a short-term cap rather than the 10-year spending cap of the Republican bill. And they want that cap to be based on a higher spending level than Republicans, the amount of this year’s federal funding bill that Mr. Biden signed into law in December. Republicans have moderated spending growth from fiscal 2022.

Administration officials will also strike a deal with Republicans to accelerate approvals for a wide range of energy projects, including wind, oil, gas and solar, a top priority for Senator Joe Manchin III of West Virginia. positive. And Biden said on Tuesday that he would consider reclaiming some of the unused stimulus included in the bill he signed into law in 2021, a Republican priority.

Officials hope such a deal can win approval from business groups and pressure on Republicans. Such a combination of issues formed the basis of a potential debt-restriction deal presented earlier this month by officials at the US Chamber of Commerce.