Biden to speak with House Speaker McCarthy on debt limit Sunday.

Biden Plans to Speak with Top Republican on Debt Ceiling

President Joe Biden is set to speak with top congressional Republican Kevin McCarthy on Sunday as part of last-minute talks over raising the federal $31.4 trillion debt ceiling. Biden, who is currently in Japan for the Group of Seven (G7) summit, sought the call after his negotiating team briefed him on the status of talks that broke up on Friday with no signs of progress. There are less than two weeks before June 1, when the Treasury Department has warned that the federal government could be unable to pay all its debts. That would trigger a default that could cause chaos in financial markets and spike interest rates.

Proposals Too Extreme

Officials did not meet on Saturday and announced no progress from meetings on Friday or any plan to talk again. Instead, both sides cast the other’s proposals as too extreme. White House Press Secretary Karine Jean-Pierre noted in a statement that Biden and McCarthy, the speaker of the House of Representatives, had agreed that any budget agreement would need to be bipartisan and accused Republicans of offering proposals too far to the right to pass Congress.

Steep Cuts and Work Requirements for Aid

A source familiar with the negotiations said Republicans had proposed an increase in defense spending, while cutting overall spending. The source also said House Republicans wanted to extend tax cuts passed under then-President Donald Trump, which would add $3.5 trillion to the federal debt. The person said Republicans had also rejected Democrats’ proposed measures to raise revenue, including drug payment reforms and closing “tax loopholes.” Another person familiar with the talks said Republicans’ latest proposal included “steep” cuts over a longer period of time than recent budget deals, as well as a variety of measures that irk Democrats, including work requirements for aid, cuts to food assistance and less money for the tax-collecting Internal Revenue Service.

No Deal Can Pass Without Bipartisan Support

Republicans hold a slim majority of seats in the House and Biden’s fellow Democrats have narrow control of the Senate, so no deal can pass without bipartisan support. U.S. Representative Patrick McHenry, a Republican negotiator, had said Republicans leaders were “going to huddle as a team and assess” where things stood. Congressional Republicans voted to raise the debt ceiling three times, with no budget cut pre-conditions, when Republican Trump was in the White House.