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Debt ceiling: Biden, McCarthy to hold pivotal meeting as time to resolve grows short

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WASHINGTON - President Joe Biden and House Speaker Kevin McCarthy are set to meet at the White House at a pivotal moment as Washington works to strike a budget compromise and raise the nation's borrowing limit in time to avert a devastating federal default.The meeting Monday afternoon between the Democratic president and the new Republican speaker will be critical as they race to prevent a looming debt crisis.

After a weekend of start-stop talks, both men appeared upbeat as they face a deadline, as soon as June 1, when the government could run out of cash to pay its bills.Biden and McCarthy spoke by phone Sunday while the president was returning home on Air Force One after the Group of Seven summit in Japan. "It went well, we’ll talk tomorrow," Biden said in response to a shouted question upon his return late Sunday.The call revived talks and negotiators met for 2 1/2 hours at the Capitol late Sunday evening, saying little as they left.

Financial markets turned down last week after talks stalled.McCarthy, R-Calif., told reporters earlier Sunday that the call with Biden was "productive" and that the on-again, off-again negotiations between his staff and White House representatives are focused on spending cuts.Biden told a press conference before departing from Japan: "I think that we can reach an agreement."FILE - US President Joe Biden (R) meets with US Speaker of the House Kevin McCarthy in the Oval Office of the White House in Washington, DC, on May 9, 2023. (Photo by BRENDAN SMIALOWSKI/AFP via Getty Images) The contours of an agreement appear within reach, and the negotiations have narrowed on a 2024 budget year cap that would be key to resolving the standoff.

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Debt ceiling deal needs to happen by June 5 to avoid default: Yellen
Memorial Day long weekend, Treasury Secretary Janet Yellen extended the deadline for a deal to raise the government’s $31.4 trillion debt ceiling, but only by four days.Originally, Yellen said the deadline was as early as June 1 to avoid a potential default but in a letter to Congress on Friday, the date was extended to June 5.Yellen said her department would make more than $130 billion in scheduled payments in the first two days of the month, including to veterans and Social Security and Medicare recipients, but encouraged the White House and Republicans to come to an agreement “as soon as possible.”“If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests,” she wrote.The extension comes as President Joe Biden and Republican Speaker Kevin McCarthy appeared to narrow in on a two-year budget deal that was aimed at curbing federal deficits.The pair are hoping to strike a compromise over the weekend, but any deal would need to be a compromise as support would be needed from Republicans and Democrats to pass a divided and narrowly-controlled Congress.On Friday evening before departing for Camp David, Biden said “things are looking good.”“I’m hoping we’ll have some clear evidence tonight before the clock strikes 12 that we have a deal,” he said. “But it’s very close.”Despite potential hang-ups, including over stiffer work requirements on people receiving government food stamps, both sides appeared to be optimistic that they could find a deal.“I’m a total optimist,” McCarthy said Friday.
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