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Biden and McCarthy talk, but no deal is reached on raising the debt ceiling

MICHEL MARTIN, HOST:

President Biden and House Speaker Kevin McCarthy met last night for the first time since debt limit negotiations seemed to stall in recent days. They sounded an optimistic note but acknowledged they're still far apart. Here's Biden before that meeting.

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PRESIDENT JOE BIDEN: We have to be in a position where we can sell it to our constituencies. We're pretty well-divided in the House, almost down the middle. And it's not any different in the Senate.

MARTIN: It just isn't clear if they can reach a deal before the country breaches the debt ceiling in as few as nine days. NPR's congressional correspondent Claudia Grisales is with us this morning to tell us more. Good morning, Claudia.

CLAUDIA GRISALES, BYLINE: Good morning, Michel.

MARTIN: So let me start with this meeting last night between President Biden and Speaker McCarthy. Where are both sides now?

GRISALES: As you mentioned, still pretty far apart. But they both tried to sound this optimistic tone. McCarthy said it marked the best discussion they've had on this yet. And he still thinks they can get this done in time to avoid a financial default.

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KEVIN MCCARTHY: I think it was productive in the professionalism, the honesty with one another and the desire to try to find common ground.

GRISALES: Biden, in a statement, also called it a productive meeting and said that their staffs will now continue to discuss a path forward. McCarthy expects they'll talk perhaps daily. And their staffs will continue to meet to get this done. But we should note that Treasury Secretary Janet Yellen has repeated in a new letter to congressional leaders that it is highly likely that the U.S. will be unable to satisfy all of the government's obligations if Congress has not acted to raise or suspend the debt limit by early June and as early as June 1.

MARTIN: So as briefly as you can, where are both sides stuck? And where could they find agreement?

GRISALES: McCarthy said nothing is agreed to and everything is being talked about. For example, he says he will not talk about any options to raise revenues, which is a key sticking point. Biden says he believes Republicans should consider a look at tax loopholes to make sure that the wealthy pay their fair share. And he said revenue matters as long as you are not taxing individuals with annual incomes of under $400,000 a year.

And McCarthy has repeatedly said that spending cuts need to be central to this deal because he believes the government is spending too much. And he wants to see a deal where spending declines next year from this year. But he has also said that defense cuts are not on the table, so that leaves fewer places to install these slashes in spending. And he's talked about new working requirements for certain Americans who need federal assistance. And there could be potential agreement when it comes back to clawing back unspent funds, like those related to pandemic relief bills.

MARTIN: Do we have any sense about how this issue is playing among Americans - obviously, that's a big group, but in terms of what approach should be taken here to resolve this?

GRISALES: Yes. Our new NPR/PBS NewsHour/Marist poll out this morning found that a slim majority wants the debt ceiling raised without being tied to spending cuts. That is, they want to see leaders leave the talks about cuts for a separate conversation. But those results are driven by Democrats. In the poll, Republicans overwhelmingly said they want cuts tied to the debt ceiling, while independents are split. Now, if they don't get anything done, there is a lot of blame to go around. People are split on who would take that blame. But when you look at independents, which is a key group for the 2024 elections, they would blame Biden by a nine-point margin. That's 47 to 38. And that can give you more insight as to why the White House is so motivated to get this done.

MARTIN: That is NPR's Claudia Grisales. Claudia, thank you so much.

GRISALES: Thank you. Transcript provided by NPR, Copyright NPR.

Michel Martin is the weekend host of All Things Considered, where she draws on her deep reporting and interviewing experience to dig in to the week's news. Outside the studio, she has also hosted "Michel Martin: Going There," an ambitious live event series in collaboration with Member Stations.
Claudia Grisales is a congressional reporter assigned to NPR's Washington Desk.