September 24, 2023

WASHINGTON – President Joe Biden seems optimistic about the odds of reaching an agreement with Republicans to raise or suspend the debt ceiling in time to avoid the economic fallout from a possible US debt default.

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“I really think it’s their desire, as well as our desire, to reach an agreement, and I think we’ll be able to do it,” Biden told reporters in Delaware on Sunday. Regarding his state of mind, he said, “I remain optimistic because I am a born optimist.”

Biden described the ongoing talks between White House liaisons and congressional aides as “negotiations”, a remarkable choice of words after insisting for months that he would not “negotiate” over the debt ceiling. The president and top four Congress leaders plan to meet again on Tuesday about the debt ceiling.

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“I learned a long time ago, and you know what I do: It’s never a good idea to portray negotiations in the middle of negotiations,” Biden said in response to a question about the state of negotiations.

On Monday, when reporters asked him if he could provide an update on budget talks, the president appeared to be taking his own advice. “No,” said Biden, who was on his way to Philadelphia for the day.

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Biden’s remarks followed the postponement of a White House meeting originally scheduled for Friday, which was attended by House Speaker Kevin McCarthy, R-Calif., Minority Leader Hakeem Jeffries, D-N.Y., Senate Majority Leader Chuck Schumer, DN.Y and Minority. Leader Mitch McConnell, R-Ky.

The White House said the three-day delay should be seen as a sign of progress in the talks. White House press secretary Karine Jean-Pierre said on Friday, “The meetings have been productive over the past few days and the leaders wanted to continue that before regrouping.”

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Democrats have spent months blasting a proposal from House Republicans, which calls for sweeping cuts to federal spending in exchange for agreeing to pass a debt ceiling increase. Last Thursday, Biden accused the House GOP of “holding our economy hostage.”

Against this backdrop of months of bitter partisan attacks, Biden’s sudden change in tone on Sunday was striking.

But not everyone involved in the talks has such a sunny outlook.

“I still think we’re a long way off,” McCarthy told NBC News outside the Capitol on Monday, “I just don’t think they want a deal yet.”

“It sounds like they want to look like they’re in a meeting,” McCarthy said. “They’re not talking about anything serious.”

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While Democrats have been reluctant to discuss the GOP’s broad plan to reduce federal spending, Biden on Sunday appeared ready to entertain specific Republican proposals.

Asked whether he would consider a House GOP plan to toughen work requirements for Social Safety Net programs, Biden did not dismiss the idea out of hand, as several high-profile Democrats have done.

Instead, he pointed to his own Senate record of voting for welfare work requirements in the 1990s.

“I voted for tougher assistance programs, it’s in law now, but it’s a different story for Medicaid,” he said. “And so I’m waiting to hear what their exact proposal is.”

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A Republican bill passed last month included stricter work requirements not only for Medicaid, but also for Temporary Assistance to Needy Families, or TANF, funds, as well as the Supplemental Nutrition Assistance Program food stamps. The fact that Biden closed Medicaid, but not TANF and SNAP, offered a window where Democrats might be willing to give up a little.

Biden also said he planned to travel to Japan later this week to attend the G-7 summit, a trip he previously said he could attend virtually if debt ceiling talks were to go ahead. This requires them to live in Washington.

While McCarthy stopped short of criticizing the president for traveling abroad during the conversation, he suggested that both leaders and staff have at least until the end of this week to move the bill through Congress before the potential default date. A short-term debt ceiling deal would need to be reached. Which may come as early as June 1.

“I think we’ve got a deal by the end of this week,” McCarthy said, adding, “The president hasn’t taken it seriously.”

Investors are watching how the talks unfold. Stocks fell Monday morning as the market chewed on comments from Biden and McCarthy.