Speaker Kevin McCarthy (R-Calif.) on Tuesday left a meeting on the debt ceiling with President Biden and other congressional leaders saying the structure of negotiations had improved and that he held out hope a deal would be possible in the coming days.

While the two sides are still working through key differences, McCarthy told reporters that Biden had “changed the scope” of who is involved in talks, appointing White House officials to work directly with members of the Speaker’s team as they try to reach an agreement.

“So, the structure of how we negotiate has improved. So it now gives you a better opportunity, even though we only have a few days to get it done,” McCarthy told reporters after a roughly hourlong meeting.

McCarthy has said officials only have a few days to reach a deal in order to avoid default before June 1, which is the date the Treasury Department has warned the U.S. may default on its debts.

“It is possible to get a deal by the end of the week. It’s not that difficult to get to an agreement,” McCarthy said.

Prior coverage of the debt ceiling from The Hill:

Shalanda Young, a longtime Capitol Hill aide and head of the Office of Management and Budget, will lead talks for the White House along with top Biden adviser Steve Ricchetti.

The Speaker’s rhetoric appeared more optimistic than a week ago, when he left a meeting with Biden and other congressional leaders saying attendees had merely restated their existing positions. But in the week since, staff members have huddled for negotiations, which both sides have characterized as positive.

“If this was where we were in February, I’d be very optimistic,” McCarthy said, referring to the Feb. 1 meeting he had with Biden to start budget talks.

Democrats sound more optimistic

Majority Leader Chuck Schumer (D-N.Y.)

Majority Leader Chuck Schumer (D-N.Y.) addresses reporters following the weekly policy luncheon on Tuesday, May 2, 2023.

Democratic leaders also left the meeting with a more optimistic tone compared to last week. Senate Majority Leader Chuck Schumer (D-N.Y.) said that everyone in the room, including McCarthy, agreed that a bipartisan solution is needed to avoid default.

He added that he was glad to see that everyone “understood what a disaster default was” and said that the conversation was more cordial than last week, with “honest and real discussions” that were “respectful.” 

House Minority Leader Hakeem Jeffries (D-N.Y.) also described the conversation as “open,” “honest” and “cordial.”

Where do parties differ?

Speaker Kevin McCarthy (R-Calif.)

Speaker Kevin McCarthy (R-Calif.) speaks to reporters at the Capitol following a meeting at the White House with Congressional leaders and Vice President Harris to discuss the debit ceiling on Tuesday, May 16, 2023. (Greg Nash)

There are still areas of disagreement on talks, with House Republicans pushing for significant spending cuts and repeatedly pointing to a bill that passed with no Democratic votes late last month. The White House has said it would veto that bill and warned that the GOP proposals would lead to steep, across-the-board cuts to government services.

The White House has maintained for months that it is Congress’s responsibility to raise the debt ceiling without conditions. But in recent days, Biden has signaled there are spending areas he is willing to negotiate, including unspent COVID-19 relief funds and certain work requirement programs.

McCarthy on Tuesday called rescinding the COVID funding a “no-brainer,” adding that he thinks “at the end of the day, it will be in the bill.” 

In terms of work requirement programs, the speaker argued they “lift people out of poverty [and] put them into jobs,” adding that they can also help supply chains by having “able-bodied people with no dependents … build things in America.”

Biden’s recent comments have elicited criticism from some Democrats, who worry about the White House making too many concessions.

But press secretary Karine Jean-Pierre waved away those concerns, arguing Biden was drawing on years of experience to try to get a deal across the finish line and avoid default.

“This is a president who has been around the block a few times. He knows how to make deals. He knows how this works,” Jean-Pierre said. “And there’s no one more experienced in knowing how to get this done.”

June 1 deadline looms

U.S. Treasury Secretary Janet Yellen has set a firm deadline of June 1 to avoid default. (AP Photo/Shuji Kajiyama, Pool)

The second meeting in the past eight days comes up against the June 1 deadline the Treasury Department determined would be the date the U.S. could default on trillions of dollars of debt, which could cause havoc on the financial system.

Biden is set to leave for Japan for the Group of Seven (G-7) summit Wednesday and will return to Washington on Sunday, cutting short his original itinerary in order to resume debt talks. When asked if Biden should even be attending the G-7, McCarthy said the president can make his own decisions about his time.

Biden is expected to check in with congressional leaders by phone later this week, the White House said, with an in-person meeting planned for next week when the president returns from overseas.