Biden optimistic about a debt limit deal, but McCarthy says White House isn't being serious

Key Points
  • President Joe Biden said he thinks the White House and congressional leaders can hammer out a deal to raise the debt ceiling.
  • House Speaker Kevin McCarthy, however, said he thinks the sides are still "far apart."
  • Their remarks came ahead of a Tuesday meeting between Biden, McCarthy, House Democratic Leader Hakeem Jeffries, Senate Majority Leader Chuck Schumer and Senate Minority Leader Mitch McConnell.
U.S. President Joe Biden, who just announced his reelection campaign for president, delivers remarks at North America's Building Trades Unions Legislative Conference at the Washington Hilton, Washington D.C, April 25, 2023.
Leah Millis | Reuters

WASHINGTON — President Joe Biden sounds optimistic about the odds of reaching a deal with Republicans to raise or suspend the debt limit in time to avoid economic fallout from even a potential U.S. debt default.

"I really think there's a desire on their part, as well as ours, to reach an agreement, and I think we'll be able to do it," Biden told reporters Sunday in Delaware. As to his state of mind, he said, "I remain optimistic because I'm a congenital optimist."

Biden also characterized the talks underway between White House liaisons and congressional aides as "a negotiation," a notable choice of words after months of insisting he would not "negotiate" over the debt limit. The president and the top four congressional leaders plan to meet again about the debt ceiling Tuesday.

"I've learned a long time ago, and you know as well as I do: It never is good to characterize a negotiation in the middle of a negotiation," Biden said in response to a question about the status of the talks.

The president appeared to take his own advice Monday when reporters asked him if he could provide any updates on the budget talks. "No," said Biden, who was en route to Philadelphia for the day.

Biden's remarks followed the postponement of a White House meeting, originally set for Friday, with House Speaker Kevin McCarthy, R-Calif., Minority Leader Hakeem Jeffries, D-N.Y., Senate Majority Leader Chuck Schumer, D-N.Y., and Minority Leader Mitch McConnell, R-Ky.

The White House said the three-day delay should be viewed as a sign of progress in the talks. "The meetings have been productive over the past few days and leaders wanted to continue before they regrouped," White House press secretary Karine Jean-Pierre said Friday.

Democrats have spent months blasting House Republicans' proposal, which demands sweeping cuts to federal spending in exchange for agreeing to pass a debt limit hike. Just last Thursday, Biden accused the House GOP of "holding our economy hostage."

Against this backdrop of months of bitter partisan attacks, Biden's sudden shift in tone Sunday was striking.

But not everyone involved in the talks has such a sunny outlook.

"I still think we're far apart," McCarthy told NBC News on Monday outside the Capitol, adding, "It doesn't seem to me yet that they want a deal."

"It seems like they want to look like they're in a meeting," said McCarthy. "They're not talking anything serious." 

While Democrats are reluctant to discuss the GOP's sweeping plan to slash federal spending, Biden did seem willing on Sunday to entertain specific Republican proposals.

Asked whether he would consider a House GOP plan to stiffen work requirements for social safety net programs, Biden did not dismiss the idea out of hand, as several high-profile Democrats have done.

Instead, he pointed to his own Senate record of voting for welfare work requirements in the 1990s.

"I voted for tougher aid programs, that's in the law now, but for Medicaid it's a different story," he said. "And so I'm waiting to hear what their exact proposal is."

A Republican bill passed last month included stricter work requirements not only for Medicaid, but for the Temporary Assistance to Needy Families, or TANF, funds, as well as Supplemental Nutrition Assistance Program food stamps. The fact that Biden roped off Medicaid, but not TANF and SNAP, offered a window into where Democrats might be willing to give a little.

Biden also said he planned to travel to Japan later this week to attend the G-7 summit, a trip he had previously said he could attend virtually if debt limit talks required him to remain in Washington.

While McCarthy stopped short of criticizing the president for traveling abroad during negotiations, he suggested that both leaders and staff would need to reach at least a short-term debt limit deal by this weekend in order to move a bill through Congress before a potential default date that could come as early as June 1.

"I think we've got to have a deal done by this weekend," McCarthy said, lamenting that the president "hasn't taken it serious."

Investors are watching how the negotiations unfold. Stocks declined Monday morning as the market chewed over the comments from Biden and McCarthy.