Debt ceiling negotiators ‘making progress’, says President Biden even as deal remains elusive

WASHINGTON– Seeking to strike a reassuring tone despite days of negotiations, President Joe Biden said Thursday afternoon that he had had several “productive conversations” with House Speaker Kevin McCarthy and that their teams were “making progress” on the debt ceiling talks as the country moved closer to default.

‘I’ve been clear time and time again: Defaulting on our national debt is not an option,’ Biden said as he delivered a speech at the Rose Garden before appointing a new Joint Chiefs of Staff chairman. joint.

But a deal still remains elusive with just seven days before a potential default. Treasury Secretary Janet Yellen argues that the US government could run out of cash to pay all its bills in early June, possibly as early as June 1.

House members left town Thursday for Memorial Day weekend, but were told to be ready to return if a deal was reached.

“It’s time for Congress to act now,” Biden said at the Rose Garden. “I want to be clear: The negotiations we have with President McCarthy are about the outline of what the budget will look like, not about the default. These are about competing visions for America.”

Leaving the Capitol later Thursday, McCarthy confirmed there was no longer a deal in the works, after “walking back and forth” with the White House all day.

“The only way forward is with bipartisan agreement,” he said. “And I believe that we will reach an agreement that will allow us to move forward and that will protect American workers in this country.

“We have worked all day, we will continue to work to try to be able to solve the problem but there is no agreement,” he said.

He said he would be working from Washington over the holiday weekend.

“I think both teams understand that we still have some serious issues to work through and resolve and that’s going to take time,” North Carolina Rep. Patrick McHenry, a key Republican negotiator, told reporters before leaving. in the president’s office on Thursday. “That’s all we can say about it.”

McHenry then said work requirements on some federal aides were still a major sticking point.

Earlier Thursday, McCarthy told ABC News senior congressional correspondent Rachel Scott that “every hour counts” as the clock ticks toward June 1.

The speaker also expressed optimism that the two sides will reach a solution, although he dodged questions about the tighter timeline for Congress to pass a deal.

“We worked well past midnight last night,” McCarthy said. “And yesterday I think was a really good day. We’ve made some progress. There are still some outstanding issues, and I’ve asked our teams to work 24/7 to try to solve this problem.”

McHenry previously said on Thursday there remained “fundamental disagreements” to resolve.

“Nothing is resolved. Nothing is resolved. And everyone wants to think that you can lock and bank something. You can’t bank anything until you have a full deal,” did he declare.

Asked then if he was confident a deal would be done by this weekend, McHenry replied: “I’m still trying to work for the deal. And it seems very difficult because these are very difficult subjects that we deal with. I don’t. I don’t think I made any secrets about it. It’s not a position I wanted us to be in.

Even if a debt ceiling agreement is reached, Congress faces a serious time crunch to pass legislation before the end of the month. After drafting a bill, McCarthy pledged to give House members 72 hours to consider it, a concession he offered to conservative hardliners who blocked his vote for president early in the year. This year. Then the Senate will have to consider the bill before it is sent to President Joe Biden’s office.

The Memorial Day suspension further complicates matters. The House will vote on Thursday and the Senate left town last week, though leaders of both chambers have ordered lawmakers to be ready to return to Washington immediately if a deal is reached.

Several Democrats have expressed frustration in recent days with the state of negotiations, with House Minority Leader Hakeem Jeffries, D.N.Y., sounding McCarthy’s plans to adjourn and excoriating Republicans for, according to his words, having made “unreasonable demands”.

“I understand that President Biden’s nominees as well as President McCarthy will continue to speak, but it’s unfortunate that House Republicans have chosen to leave town before sunset,” Jeffries said during an interview. a press conference.

He slammed the GOP for a “manufactured crisis” over the debt ceiling, accusing the party of holding the economy hostage.

“The Republicans are leading us down a dangerous default road or have presented the American people with another unacceptable choice, which is devastating cuts for children, devastating cuts for Medicaid, devastating cuts for nutrition, devastating cuts for the education, devastating cuts to public safety and devastating cuts to our veterans,” he said.

Congressional Progressive Caucus representative Pramila Jayapal of Washington expressed similar concerns, warning Wednesday that progressives “will not accept a deal that hurts working people.”

Rep. Jamaal Bowman, DN.Y., said he was “very concerned” that Biden was giving too much away in the negotiations.

Bowman added, “I plead for the White House to make sure we don’t hand over the house and fail in our responsibilities.”

Jeffries said Thursday that Biden “continues to stay the course” on spending cuts sought by Republicans.

Meanwhile, hardline conservatives are telling McCarthy to hold on as well. They say they seek to end Democrats’ “dependence” on government spending, which they blame for inflation and other economic problems.

“Hold the line,” Rep. Chip Roy, R-Texas, said.

“This White House is a travesty of leadership. So we have to stand our ground and lead the country. And we have the ability to do that,” said Rep. Bryon Donalds, R-Fla.

As the politics unfold, credit rating agency Fitch warned on Thursday that it was putting the U.S. credit rating on watch for a possible downgrade.

Pressed for his reaction, McCarthy said he wasn’t worried.

“I’m worried, at the end of the day, if you don’t have a deal worthy of the American public, you should be worried about Fitch. I’m not,” he said.

ABC News’ Alexandra Hutzler, Allison Pecorin and Trish Turner contributed to this report.