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President Biden and Rep. McCarthy meet, with high stakes for the U.S. economy

ARI SHAPIRO, HOST:

President Biden and House Speaker Kevin McCarthy met this afternoon looking to break an impasse over raising the debt limit. The meeting opened on an optimistic note. Biden says he thinks they can reach a deal before the government runs out of money to pay its bills.

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PRESIDENT JOE BIDEN: We still have some disagreements, but I think we may be able to get where we have to go.

SHAPIRO: NPR's Franco Ordoñez is covering these talks from the White House. Franco, what's the latest on the state of play?

FRANCO ORDOÑEZ, BYLINE: Well, Ari, the meeting lasted just over an hour. And when they came out, House Speaker Kevin McCarthy, he called it the best meeting they've had on the issue.

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KEVIN MCCARTHY: I believe we can get it done.

ORDOÑEZ: You know, the tone was really different. I mean, it was very positive. Both leaders said they think they can reach a deal before the government runs out of money.

SHAPIRO: That is a shift. Leading up to this meeting, there were a lot of stops and starts. This weekend, things came to a halt. Does it seem like a breakthrough?

ORDOÑEZ: You know, it is positive, but it's really too soon to tell for sure. But they told staff to continue talking to find common ground. And McCarthy says staff will work through the night, and he says he thinks that he and Biden will talk every day now. And Biden said at the start of the meeting that he said it's time for both sides to find compromise.

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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. So we've got to get something we can sell to both sides.

SHAPIRO: Franco, are there any areas where it's clear the two sides are not in sync right now?

ORDOÑEZ: Well, the White House has proposed keeping spending flat this year and next. And Biden wants to look at tax revenue as a way to reduce debt, but McCarthy ruled that out flat out.

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MCCARTHY: The problem is - is not revenue. The problem is spending. So if you want to know where our differences have been, it's always been the same place.

ORDOÑEZ: And he's continuing to say that the government needs to spend less than it did last year. He's calling for a lot of different spending cuts, and he also wants more work requirements to limit federal aid to programs like Medicaid. After the meeting, Biden acknowledged that there were still some disagreements but said in a statement that the only way to move forward is with a bipartisan agreement.

SHAPIRO: There are big economic consequences to a default, as we have discussed in other parts of the show. Politically, though, who has more to lose if the government defaults on its debts?

ORDOÑEZ: I mean, look, it's clear that both Biden and McCarthy are trying to avoid any type of blame. McCarthy needs to keep the right flank of his party happy, or he could really lose his speakership. And for Biden, you know, he's very concerned because the economy, while this is an issue that he blames on Congress for not, you know, doing its congressional duty in passing the debt limit - this economy, whether he likes it or not, is basically his. He's the president. And he's also running for reelection in 2024, and he knows that voters will hold him accountable for the economy when their vote comes up. So there is a lot riding on this deal.

SHAPIRO: That is NPR's Franco Ordoñez covering every twist and turn of the debt ceiling talks from his perch at the White House. Franco, thank you for the update.

ORDOÑEZ: Thank you, Ari. Transcript provided by NPR, Copyright NPR.

Franco Ordoñez is a White House Correspondent for NPR's Washington Desk. Before he came to NPR in 2019, Ordoñez covered the White House for McClatchy. He has also written about diplomatic affairs, foreign policy and immigration, and has been a correspondent in Cuba, Colombia, Mexico and Haiti.
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