With time running out to meet the debt ceiling or risk default, President Joe Biden said Tuesday he would cut short his upcoming foreign trip to be back in time for “final negotiations.”
Biden will leave on Wednesday to meet with G-7 leaders in Japan, but will now return on Sunday and will not visit Papua New Guinea or Australia.
Biden would have become the first sitting US president to visit Papua New Guinea and is scheduled to participate in the Quad summit in Australia. House Speaker Kevin McCarthy and other Republicans criticized Biden’s plans to go abroad as lawmakers face a possible June 1 default deadline.
“The President made it clear that members of Congress from both parties and chambers must come together to avoid default, as they have 78 times before. President’s desk,” said White House press secretary Karine Jean- Pierre in a statement.
Debt ceiling negotiations continued Tuesday afternoon when Biden, McCarthy, House Minority Leader Hakeem Jeffries, Senate Majority Leader Chuck Schumer and Senate Minority Leader Mitch McConnell met at the White House.
Biden, speaking later at a White House celebration of Jewish Heritage Month, called it “a great, productive meeting” on a path forward to avoid default.
“There is still work to be done but I made it clear to the speaker and others that we will be speaking regularly over the next two days, and the staff will continue to meet every day to make sure we don’t default,” the president said. , adding that he cut his trip short “to come back for final negotiations.”
McCarthy emerged from the discussion saying the two sides were still far apart but also said it was “possible” an agreement could be reached within days.
“It’s possible to get a deal by the end of the week,” McCarthy told ABC News Senior Congressional Correspondent Rachel Scott outside the White House. “It’s not that hard to come to an agreement.”
What changed in Tuesday’s meeting, McCarthy said, was how the parties will negotiate moving forward. Biden agreed to assign two top members of his staff to work directly with McCarthy and his staff, the spokesman said, instead of negotiations between all four congressional leaders.
“The structure has changed so we’re in a better process,” McCarthy said.
After the meeting, Schumer told reporters that leaders agreed they needed to pass “a bipartisan bill with bipartisan support in both chambers.”
“Default is the worst, worst alternative and having a bipartisan bill in both chambers is the only way we can avoid default,” the Democratic Senate leader said.
Adding to the pressure ahead of Tuesday’s debt ceiling summit, Treasury Secretary Janet Yellen said the economic shock that would result from an unprecedented default “could lead to a recession.”
“It is imperative that Congress act soon,” he said during remarks in downtown Washington, saying they were already seeing “the effects of brinkmanship” and “a default would constitute an economic disaster.”
Yellen has repeatedly warned that the US could default as early as June, possibly as soon as June 1, though the exact date remains uncertain.
Yellen wrote Monday in a letter to McCarthy that the Treasury is already seeing adverse effects on the economy as negotiations continue — including rising borrowing costs — and more damage could come if lawmakers wait until the last hour to make a deal.
Biden and Democrats have insisted that Republicans take default off the table, and separate the debt ceiling from the 2024 budget. Republicans, on the other hand, said they did their job by passing the Limit, Save, Grow Act last month to raise the debt ceiling and implement deep spending cuts.
Possible areas of agreement in budget talks that have emerged since the last debt ceiling meeting between the so-called “Big Five” include recovering billions of dollars in unspent COVID-19 relief and reforming the permitting process for energy projects — a GOP priority — sources familiar with the conversations told ABC News.
“It shouldn’t be difficult,” McConnell said after Tuesday’s meeting. “No. 1, we know we’re not going to default. They know, we know. We’re running out of time.”
