Biden to Speak With McCarthy on Stalled Debt-Limit Talks

President Joe Biden will hold a call with House Speaker Kevin McCarthy about debt-ceiling and budget negotiations during his flight back from Japan aboard Air Force One, according to a person familiar with the matter.

(Bloomberg) — President Joe Biden will hold a call with House Speaker Kevin McCarthy about debt-ceiling and budget negotiations during his flight back from Japan aboard Air Force One, according to a person familiar with the matter.

The call, which will take place Sunday morning Eastern time, comes as talks reached an impasse with time running out to avoid default. Treasury Secretary Janet Yellen has said the US could run out of cash to meet its obligations as soon as June 1.

McCarthy on Saturday accused White House officials of backtracking in talks on raising the debt-limit and setting federal spending levels. He said it’s unlikely negotiations would become unstuck until Biden returned from the Group of Seven leaders summit in Hiroshima.

Read More: Biden Seeks to Call McCarthy After Debt-Limit Talks Hit Impasse

Biden has received constant updates from his advisers on the situation, including on Saturday night and Sunday morning in Japan. The president had told reporters he would have a phone conversation with the speaker, but declined to elaborate on his message to him.

Just a day earlier, Biden expressed confidence the negotiations would not lead to a catastrophic default. But since then, White House aides and Republicans have engaged in mutual recriminations, with each side accusing the other of negotiating in bad faith.

Republicans rejected a White House proposal that would have kept defense and non-defense discretionary spending in 2024 compared with the current fiscal year, according to two people familiar with the talks. McCarthy said that non-defense spending must be lower, while Democrats argue that keeping appropriations the same amounts to an effective cut because of inflation.

Democrats have repeatedly pushed for changes for the tax code to be included in the talks in order to raise revenues, but Republicans have not agreed. In addition, Democrats say a GOP proposal to increase the Pentagon’s budget would force deeper cuts to social programs they strongly oppose.

(Updates with context, background starting in third paragraph)

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