Biden and McCarthy are talking trying to reach a debt ceiling deal

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The White House and congressional Republicans were racing to strike a deal to avoid a default on US debt on Saturday, with high-stakes negotiations on a bipartisan fiscal deal continuing into the weekend.

US President Joe Biden and Republican House Speaker Kevin McCarthy spoke by phone Saturday night to try to resolve the final sticking points, a person familiar with the talks said, after negotiators failed to reach an agreement during the day.

Earlier, McCarthy told reporters that the negotiators had made progress in resolving their differences.

“We made progress, we worked well earlier this morning, and we’re back at it now. Some things we have to finish,” McCarthy said. “We have to make sure we get the right agreement for the American people.”

He nodded to the fact that the deal with Biden would involve tough compromises.

Not everyone will like what the end of the agreement is. . . on both sides. “Is it all I wanted? No, it has to pass the Senate and be signed by the President. But I firmly believe that if people, from all of America, would sit down and look at this, they’d say, ‘You know what? This is a much better product.'”

Biden expressed optimism about the talks on Friday night before leaving for Camp David, the presidential retreat in Maryland, where he is watching the final phase of the negotiations.

Although both sides are uniting around a deal that would raise the debt limit for two years and limit government spending over the same period, a person familiar with the talks said Republican demands to attach new labor requirements to anti-poverty programs remained a sticking point.

The White House and Congress have until June 5 to enact legislation to raise the country’s $31.4 trillion debt ceiling or the United States will run out of money to pay all its bills, according to the latest estimate by Janet Yellen, the US Treasury secretary, which was released on Friday.

If no deal is reached, the United States will face a devastating default on its government debt, which could roil global financial markets, trigger a sharp economic downturn, and damage America’s creditworthiness.

House Republicans have pledged to give lawmakers at least 72 hours to consider the debt ceiling legislation before a vote, after which it will move to the Senate for final passage in Congress.

Both Republican and Democratic leaders will need to limit the number of defections in their ranks in order to ensure approval of any deal, as hardliners in both parties are likely to reject the emerging compromise.

But many lawmakers and the White House are likely to see the agreement as necessary to avoid a broader and self-inflicted economic and financial meltdown with less than 18 months to go before the next presidential election.

Shalanda Young, the White House budget director, and Steve Richetti, a top Biden aide, led the talks on behalf of the president, while Patrick McHenry, chairman of the House Financial Services Committee, and Garrett Graves, R-Louisiana, lead the talks. They were doing the same thing with McCarthy.

The speaker reunited with McCarthy and Graves at the US Capitol on Saturday, though they left briefly to buy Chipotle Meals for lunch.

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