Biden appoints 2 additional top aides to try and get to the finish line on debt ceiling talks

The two additional negotiators will join Louisa Terrell, Biden’s top legislative liaison, who has played a key role in the talks so far.

But even the green shoots of optimism of a new negotiating team came amid larger uncertainty. The White House meeting with congressional leaders on Tuesday — the second in as many weeks — broke up with no agreement between Biden and GOP congressional leaders on a path forward to avoid default or any preliminary agreements on policy.

House Speaker Kevin McCarthy said that the “structure” of the negotiations had improved, but he also said that Republicans and Democrats remained far apart. Though he offered his belief that it was still possible to get to an agreement by the end of the week, he added that it was “unfortunate we are where we are.”

“I think we set the stage to carry on further conversations,” McCarthy said. “The president agreed to appoint a couple people from his administration to sit down and negotiate directly with my team so I found that to be productive.”

During a White House event to mark Jewish American Heritage month, Biden called the gathering a “good productive meeting with our congressional leadership about a path forward to make sure America does not default on its debt.”

He said there is “still work to do” and that staff will continue to meet daily. He plans to speak with congressional leaders regularly over the next several days and expressed hope that “final negotiations” can get underway upon his return from Japan.

The remarks, combined with the revamping of the negotiation teams, underscored the growing belief that time was fleeting to find a resolution in the high-stakes stand off. The number of people involved in the negotiations had left lawmakers of both parties questioning whether there were too many people involved. Tuesday’s meeting was bigger than last week’s meeting, with the addition of Vice President Kamala Harris and several additional aides.

The daily staff-level talks have also been sizable affairs, raising similar questions as to whether such a large group had done as much as it can. Though the negotiations between White House aides and congressional staffers have made progress over the last week, two people with familiar with the discussions said they’ve reached a point where Biden and McCarthy — or their empowered representatives — needed to begin making final decisions on the shape of the deal.

Senate Minority Leader Mitch McConnell has been calling for weeks for those two principals to talk alone.

“The most encouraging thing to come out of the meetings we just had was the President seems to have designated someone to speak with Speaker McCarthy, which I have been recommending since February,” McConnell said. “This is a two way deal.”

Senate Majority Leader Chuck Schumer, likewise, took solace in the fact that McCarthy acknowledged default was “the worst outcome” and that a bipartisan bill was necessary, according to the New Yorker’s account.

The shifting approach to the negotiations comes as the U.S. barrels toward its borrowing limit. Underscoring the urgency, as the meeting was underway, the White House canceled a portion of Biden’s overseas trip. The president was supposed to visit Papua New Guinea and Australia following the G-7 summit in Japan. But now, Biden will plan to return to the United States on Sunday directly after the G-7, according to a person familiar with the plans.

Given the amount of time needed to get a bill through both chambers of Congress, McCarthy has suggested that the two sides need to reach an agreement by the end of this week. And even before hitting the June 1 X-date, financial analysts warn uncertainty surrounding the country’s debt could rattle global markets and prompt damaging credit rating downgrades.

Underscoring the growing anxiety on Capitol Hill, House Democrats began more aggressively pushing a Plan B. On Wednesday, they plan to begin collecting signatures on a discharge petition that would force a vote on a clean debt ceiling increase on the House floor. It’s a break-glass piece of legislation that probably wouldn’t ripen until days after the June 1 default date.

White House and congressional negotiators over the last week have discussed a potential deal centered on a few main elements: new caps on discretionary spending, a clawback of billions of dollars in unspent Covid aid, energy permitting reforms and a multiyear increase to the debt limit.

But the two sides remain far apart on the specifics, and it will likely fall to Biden and McCarthy to hash out what exactly makes it into a compromise package.

Democrats, for instance, have rejected the GOP’s proposal to cut non-defense discretionary spending by 22 percent across the board and resisted efforts to impose such caps for more than two years. Republicans argue that they need a deal to include some level of expanded work requirements for government safety net programs, such as federal cash assistance or food aid.

Biden suggested over the weekend that he would be open to Republicans’ work requirement proposals. But Democrats have since downplayed the room for negotiation, with the White House signaling it would reject any ideas that push more people into poverty.

Top House Democrat Hakeem Jeffries later told members that he considered any additional work requirements a nonstarter in the debt ceiling negotiations.

Jonathan Lemire and Burgess Everett contributed to this report.