Talks resumed on Wednesday with Republicans insisting on deep spending cuts.
“It seems to me that the dance has begun,” said Republican Rep. Frank Lucas. He added that his co-religionists in the House of Representatives are unlikely to achieve the scope of the budget cuts they have proposed, but that a middle ground could be found to curb what he called the Democrats’ “spending binge.”
Deep disagreements persist over competing pressures to cut spending and raise taxes.
Biden was open to the Republicans’ request to recover some of the unused money for COVID-19 relief, which is less than $80 billion. Meanwhile, the White House reiterated its support for legislation that speeds up the granting of government permits for energy projects by setting maximum deadlines.
A White House statement distributed on Wednesday indicated that the government “supports the important reforms” contained in a bill by Democratic Senator Joe Manchin. Republicans don’t support that bill, but say the permitting reforms would help the United States maintain its lead in oil and gas development. Democrats believe it would encourage the development of “clean” energy projects.
“Default is not an option,” Biden told reporters after the meeting last Tuesday. “I have told congressional leaders that I am prepared to start a separate discussion on my budget.”
“I have not seen any new movement,” Republican congressional leader Kevin McCarthy told reporters after Tuesday’s meeting, complaining that President Biden did not agree to talks until time runs out. “That is not the way to govern,” he said. The White House commented “does not have a plan B.”
In the past, debt ceiling fights have typically ended with a hasty deal in the closing hours of negotiations, thus avoiding a default.
In 2011, the struggle led to a historic downgrade of the country’s credit rating. Veterans of that battle warn that the current situation is more risky because political divisions have deepened.
Tuesday’s meeting was closely watched on the eve of what is expected to be an increasingly tense period in Washington ahead of June, when the US Treasury predicts the country could be forced to default on some debts.
McCarthy, whose party has only a slim majority in the House, wants to tie a debt-ceiling vote to sweeping spending cuts that the White House views as draconian.
Biden’s meeting with the Speaker of the House was the first since February 1.
With information from Reuters