President Biden hosts top congressional leaders at White House to talk debt limit

President Biden will meet with top congressional leaders Tuesday to discuss the debt limit, as the date by which the federal government could run out of money to pay its bills is rapidly approaching.

The meeting comes a week after Treasury Secretary Janet Yellen warned lawmakers that without raising the debt ceiling, the government could run short of money as early as June 1.

It's the first time Biden and House Speaker Kevin McCarthy, R-Calif., will meet on this issue since the pair met in February. They will be joined by House Minority Leader Hakeem Jeffries, D-N.Y., along with Senate Majority Leader Chuck Schumer, D-N.Y., and Senate Minority Leader Mitch McConnell, R-Ky.

Last month, House Republicans passed a bill that would increase the debt limit by $1.5 trillion or through March 2024 — whichever comes first — and include trillions in deficit reduction.

But Democrats and the White House continue to insist that the bill is a nonstarter. Jeffries called the measure a "ransom note," and the bill is dead on arrival in the Democratic-controlled Senate.

In an interview on Morning Edition Tuesday, White House communications director Ben LaBolt said Biden won't be trying to cut a deal when he meets with congressional leaders this afternoon.

"The president believes the appropriate process for this is the one that already exists, which is the budget and appropriations process," LaBolt says. "So, he will not negotiate over default. The government has to meet its obligations for bills that it's already accrued over the course of years."

Congressional Democrats, along with Biden, insist legislation that addresses the debt ceiling in tandem with spending cuts is tantamount to holding the economy hostage. They are advocating for a "clean" bill that would prevent what would be the first-ever U.S. debt default and then separate negotiations on any spending cuts.

"We're not a deadbeat nation. We pay our bills," Biden said recently. "I've said all along: We can debate where to cut, how much to spend, how to finally move the tax system where everybody begins to pay their fair share or continue the route they're on. ... But not under the threat of default."

Biden and Democrats often point out that Republican lawmakers did vote to raise the debt limit multiple times when President Donald Trump was in office.

In a recent interview with MSNBC, Biden said he thinks McCarthy is "an honest man," but "MAGA Republicans really have put him in a position where in order to stay speaker, he has to agree — he's agreed to things that maybe he believes, but are just extreme."

McCarthy ultimately won a protracted fight for the speaker's gavel after pledging to a bloc of hard-line Republican lawmakers that he would not allow a House vote on a bill to increase the country's borrowing authority without federal spending reductions.

On Saturday, Sen. Mike Lee of Utah sent a letter, co-signed by 42 fellow Senate Republicans, to Schumer saying they oppose raising the ceiling without "substantive spending and budget reforms."

The Tuesday meeting falls as the conservative American Action Network is airing a $250,000 cable ad campaign in the Washington, D.C., area calling on Biden to negotiate with congressional Republicans.

Ahead of the meeting, Business Roundtable CEO Joshua Bolten released a statement saying the "cost of a default, or even the threat of a default, is simply too high."

"A default would deliver a severe blow to the economy, leading to widespread job losses, decimated retirement savings and higher borrowing costs for families, businesses and the government," he said. "Failing to raise the debt limit would also threaten the U.S. dollar's central role in the global financial system to the benefit of China."

The clock is ticking

The U.S. hit its current debt limit — $31 trillion — in January.

The Treasury Department has been employing extraordinary measures to essentially act as a Band-Aid for several months. If Congress fails to raise the debt limit by the time those measures are exhausted, which Yellen says could happen as soon as June 1, there would be an unprecedented debt default, whose effects would likely be felt worldwide and lead to a recession in the United States.

It's unlikely that Tuesday afternoon's meeting will yield drastically different responses from any of the players.

This is also a short month for lawmakers to try to address the issue. Both the Senate and the House have separate recess weeks planned.

Over the weekend, both Jeffries and House Financial Services Committee Chairman Patrick McHenry, R-N.C., didn't rule out a short-term solution to buy lawmakers more time to craft a longer-term deal.

"Everything's on the table at this point," McHenry said on Face the Nation.

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