Democratic President Joe Biden and top congressional Republican Kevin McCarthy edged closer to a deal to avoid a looming U.S. debt default Tuesday, as the threat of an economic nightmare prompted Biden to cut short an Asia trip this week. After an hour of talks, McCarthy, the speaker of the House of Representatives, told reporters the two sides remained far apart on an agreement to lift the debt ceiling. However, he said, "It is possible to get a deal by the end of the week. It's not that difficult to get to an agreement."
Democrats were not as positive about a quick time frame, but the White House called the meetings "productive and direct." Biden said the leaders reached "an overwhelming consensus ... that defaulting on the debt is simply not an option. Our economy would fall into recession." Biden also said he was disappointed that Republicans will not consider ways to raise revenue. Raising taxes on the wealthy and companies to help pay for programs for other Americans is a key part of Biden's 2024 budget.
Republicans have refused to vote to lift the debt ceiling past its $31.3 trillion limit unless Biden and his Democrats agree to spending cuts in the federal budget. However, McConnell said after the meeting, "We know we're not going to default." The U.S. government may default on some debts as early as June 1 unless Congress votes to lift the debt ceiling, and economists fear the country will slide into a recession.