Where talks stand before meeting

WASHINGTON — President Joe Biden is ready to satisfy with House Speaker Kevin McCarthy on Tuesday afternoon alongside other top congressional leaders to debate the debt ceiling, a day before Biden is slated to go to Japan for the Group of Seven summit.

Behind the scenes, staff from either side have been working every day because the leaders met last week to try to return to a deal before June, when the federal government could run out of cash. The leaders left the previous meeting with little progress to point out.

“I actually think there is a desire on their part, in addition to ours, to succeed in an agreement, and I feel we’ll give you the chance to do it,” Biden told reporters Sunday in Delaware. As to his mind-set, he said, “I remain optimistic because I’m a congenital optimist.”

McCarthy sang a special tune, telling NBC News on Monday outside the Capitol, “I still think we’re far apart.”

“It doesn’t appear to me yet that they desire a deal,” McCarthy said. “It looks like they need to appear to be they’re in a gathering. They are not talking anything serious.” 

Biden and McCarthy were slated to satisfy again Friday with Senate Majority Leader Chuck Schumer, Senate Minority Leader Mitch McConnell and House Minority Leader Hakeem Jeffries, who attended the last meeting, but that was postponed as negotiations continued behind the scenes. A source acquainted with the meetings told NBC News that the delay is a positive development and an indication that talks were “progressing.”

The White House has maintained that Biden intends to go to the G-7 summit in Japan later this week, however the president himself has said that would change depending on the debt ceiling talks. After the G-7 trip, Biden was slated to travel to Papua Recent Guinea before going to Australia for a gathering of the leaders of the “Quad” nations, the U.S., Australia, Japan and India.

McCarthy told reporters it was critical that they reach a deal before this weekend so the bill would have enough time to go through each chambers of Congress and make it back to the president’s desk for signing.

The discussions have high stakes: Defaulting on sovereign debt would wreak havoc on the economy and roil global markets. 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.

Lifting the debt ceiling is needed for the federal government to cover spending commitments already approved by Congress and the president and forestall default. Doing so doesn’t authorize latest spending. But House Republicans have said they’ll not lift the limit if Biden and lawmakers don’t conform to future spending cuts.

The Treasury Department has taken extraordinary steps to maintain paying the federal government’s bills, and expects to give you the chance to avoid a first-ever default a minimum of until early June. Treasury Secretary Janet Yellen warned last week failure to hike the debt ceiling would cause an “economic catastrophe.”

If the U.S. were to default, gross domestic product would drop 4% and greater than 7 million employees would lose their jobs, Moody’s Analytics recently projected. Even a transient default would result in the lack of 2 million jobs, in accordance with the information.