The debt ceiling meeting slated for Friday between President Joe Biden and top congressional leaders has been postponed until early next week, a source told CNBC.
Biden was set to take a seat down with House Speaker Kevin McCarthy, R-Calif., Senate Minority Leader Mitch McConnell, R-Ky., Senate Majority Leader Chuck Schumer, D-N.Y., and House Minority Leader Hakeem Jeffries, D-N.Y.
The leaders left their meeting on Tuesday with little progress to indicate but a commitment for employees members to proceed to fulfill day by day to try to succeed in a compromise.
McCarthy told reporters he didn’t see “any recent movement” in negotiating positions over the debt limit throughout the meeting.
“Everybody on this meeting reiterated the positions they were at,” before the meeting, McCarthy said outside the White House.
Every leader present aside from McCarthy agreed to remove the specter of default when asked by Biden, in line with Democratic leaders. Talking to reporters after, Biden said three of the 4 leaders were sensible throughout the discussions.
“The tenor of the meeting was with three of the 4 participants very measured and low key. Occasionally there could be slightly little bit of an assertion that perhaps was slightly excessive from the speaker,” Biden said.
A source conversant in the meetings told NBC News that the delay is a positive development.
“Meetings are progressing. Staff is continuous to fulfill and it wasn’t the precise moment to bring it back to principals,” the source said.
Lifting the debt ceiling is obligatory for the federal government to cover spending commitments already approved by Congress and the president and stop default. Doing so doesn’t authorize recent spending. But House Republicans have said they’ll not lift the limit if Biden and lawmakers don’t comply with future spending cuts.
The White House has stressed that while it’s open to debate spending cuts, it is going to not negotiate with Republicans on the debt ceiling. The Biden administration has said the GOP has a constitutional responsibility to boost the borrowing limit.
The Treasury Department has taken extraordinary steps to maintain paying the federal government’s bills, and expects to have the option to avoid a first-ever default no less than until early June. Treasury Secretary Janet Yellen warned Monday that failure to hike the debt ceiling would cause an “economic catastrophe.”
Defaulting on sovereign debt would wreak havoc on the economy and roil markets all over the world. A default on Treasury bonds could throw the U.S. economy right into a tailspin. The last time Congressional Republicans threatened a default in 2011, Standard & Poor’s downgraded the U.S. credit standing for the primary time ever to AA+ from AAA.
If the U.S. were to default, gross domestic product would drop 4% and greater than 7 million staff would lose their jobs, Moody’s Analytics recently projected. Even a temporary default would result in the lack of 2 million jobs, in line with the info.
–CNBC’s Kayla Tausche contributed to this report.