House Speaker Kevin McCarthy said there was no progress in efforts to avert a first-ever U.S. default during an hour-long meeting with President Joe Biden and other congressional leaders. “I didn’t see any new movement,” McCarthy told reporters Tuesday afternoon at the White House following his first meeting with Biden on the debt ceiling since Feb. 1. He said they would meet again on Friday.
The Oval Office meeting came hours after both made clear they aren’t interested in a short-term debt-limit extension.
Markets have shown early signs of strain as the deadline nears, and Tuesday’s continued stalemate threatens to have reverberating effects. Even as McCarthy lamented what he saw as a lack of progress, Senate Republican leader Mitch McConnell sought to assure investors that there would be agreement.
“The United States is not going to default. It never has and it never will,” McConnell said.
The lack of progress described by McCarthy is likely to increase market anxiety ahead of June 1 — the date Treasury Secretary Janet Yellen has warned the nation could exhaust its ability to meet all payment obligations without action. A short-term extension or an increase to the debt limit would be the most expedient way to delay a crisis but both sides took that off the table before the meeting.
“Why continue to kick the can down the road?” McCarthy told reporters Tuesday at the Capitol, when asked about extending the ceiling until Sept. 30. “Let’s solve it now.”
Ahead of the meeting, White House Press Secretary Karine Jean-Pierre likewise said a short-term extension isn’t Biden’s “plan” but took a dig at the speaker, who has demanded deep domestic spending cuts in exchange for Republican votes to raise the nation’s borrowing limit.
Yields on four-week Treasuries reached record highs last week as the prospect of any early June default increased. But so far equity markets have not registered a large drop attributable to the standoff. That marks a difference from the 2011 debt standoff.