"I felt we had a productive discussion – we don't have an agreement yet, but I did feel the discussion was productive in areas that we have differences of opinion," McCarthy said. "We're going to have the staffs continue to get back together and work based on some of the things that we had talked about."
Both sides stressed the need to avoid default with a bipartisan deal, but the president and congressman have struggled to make a deal as both have been pushing different measures. (Related: To increase or not to increase: Republicans and Democrats clash over $31.4 trillion debt ceiling.)
The Republican representative pressured Biden to agree to cut "spending" in the federal 2024 budget. On the other hand, the Democrat president was insisting on raising revenue through taxes, which McCarthy and his fellow Republicans are not willing to consider.
"The problem is not revenue, the problem is spending," McCarthy said, adding that the GOP will not support cuts to defense spending.
But both parties are optimistic that they can reach a compromise.
"I think at the end of the day, we can find common ground, make our economy stronger, take care of this debt, but more importantly, get this government moving again to curb inflation, make us less dependent upon China and make our appropriations system work," McCarthy said.
Meanwhile, Treasury Secretary Janet Yellen offered a reminder on Monday about how little time is left as June 1 remains as the earliest estimated default date. Yellen said it is "highly likely" that the Department of the Treasury will no longer be able to pay all government obligations by early June if the debt ceiling is not raised.
"The actual date Treasury exhausts extraordinary measures could be a number of days or weeks later than these estimates," she wrote in her letter to congressional leaders a week ago. But by Monday, her apparent optimism had vanished. Failing to reach a deal would likely trigger a global economic catastrophe.
Biden planning to use 14th Amendment to raise debt ceiling
While at the G7 Summit in Japan, Biden seemed to be toying with the idea of invoking the 14th Amendment to raise the debt ceiling without an act of Congress as he thinks he has the "authority" to do so.
"And a man I have enormous respect for, Larry Tribe, who advised me for a long time, thinks it would be legitimate. But the problem is it would have to be litigated. And in the meantime, without an extension, it would still end up in the same place," Biden said. "I'll be very blunt with you when we get by this, I'm thinking about taking a look at – months down the road – to see what the court would say about whether or not it does work."
Republicans naturally opposed this maneuver. Biden himself admitted that any attempt to circumvent the debt ceiling would likely lead to a lengthy court battle.
The 14th Amendment is primarily known for its citizenship rights and equal protection clauses, but Section 4 of the amendment relates to the nation's public debt. "The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned," the section states.
Michael Gerhardt, a constitutional law professor at the University of North Carolina, told ABC News he believed the 14th Amendment was a "viable option" as Biden could rely on that language to suggest that there's no debt ceiling and that he may have a lot of room to operate given that sort of constitutional commitment.
"But whether Biden can win is a separate question and whether he can win in litigation that goes all the way up to the Supreme Court is unclear to me," Gerhardt said.
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Watch the video below where Brannon Howse talks about the engineered debt-ceiling/financial crisis.
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US could default in its debt by July if deal on raising the debt ceiling is not reached.
NY Rep. Tenney: Biden should slash federal spending amid debt ceiling battle.
Scalise: Biden doesn't have Plan B if he vetoes McCarthy's debt bill.
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