President Joe Biden and Republican leader Kevin McCarthy spoke on the phone, signaling a shift in tone in stalled negotiations on raising the United States debt ceiling.
Mr. McCarthy reported that his conversation with Mr. Biden, who was returning from the G7 summit in Japan, had been “productive” and that the two would meet on Monday.
The two parties remain at variance over the budget cuts demanded by the Republicans as a prerequisite for raising the ceiling.
The inability to do so by June could lead to the United States defaulting on its debt.
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The federal government could not borrow additional funds or pay its obligations. The Treasury Department has warned that a default could occur on June 1.
Such a result would lead to further interest rate increases and financial market turmoil.
As he departed Japan on Sunday, Vice President Biden told reporters that House-controlled Republican proposals were “simply, quite frankly, unacceptable.”
He added, “It is time for Republicans to realize that there is no bipartisan agreement that can be reached on their partisan terms alone. They must relocate as well.”
In exchange for their support in raising the debt ceiling, Republicans are demanding $4.5tn in budget cuts, including the demise of several of Mr. Biden’s legislative priorities.
The White House has referred to the Republican proposal as “a blueprint to devastate hard-working American families” and has indicated that it may make budgetary concessions.
President Biden and Mr. McCarthy faced pressure from their respective parties’ left and proper factions to maintain the status quo.
With a one-seat Democratic majority in the Senate and a razor-thin Republican majority in the House, an agreement has thus far proven elusive.
But Mr. Biden also stated that he was willing to reduce spending to reach an agreement and would communicate with Mr. McCarthy on his way home.
Following the three-day summit in Hiroshima, the president canceled foreign trips to resolve the impasse over the national debt.
Mr. McCarthy told reporters after the call that the discussions had been productive. “I think we can solve some of these problems if he understands what we’re looking at,” he stated.
An official from the White House stated that staff members from both sides will convene this evening “to discuss outstanding issues.”
In the meantime, Treasury Secretary Janet Yellen stated on Sunday that June 1 remained a “firm deadline.” She told NBC that “we expect to be unable to pay all of our bills in early June” if no agreement is reached.
Failure to increase the debt ceiling could result in suspending social insurance payments and federal and military employee salaries. Additionally, default threatens to inflict havoc on the global economy by influencing prices and mortgage rates in other nations.
