Emerging from the closed-door meeting on Tuesday, McCarthy said both sides reiterated their positions during the sitdown, but added that staff will meet in the days ahead.
The meeting comes as leaders on both sides have drawn red lines against passing a short-term measure to temporarily raise or suspend the debt limit to buy more time for lawmakers to work out a larger deal.
“I don’t think a short-term extension does anything,” McCarthy told reporters after the meeting, which marks the first sit down both sides have had over the debt limit in months as they struggle to end a high-stakes, partisan standoff.
Biden sounded an optimistic tone in an address Tuesday night, calling the meeting “productive” while acknowledging both sides stuck to their positions.
“Everyone in the meeting understood the risk of default,” Biden told reporters at the White House, reiterating his call that leaders “need to take the threat of default off the table.”
Senate Minority Leader Mitch McConnell (R-Ky.) recently joined more than 40 Senate Republicans in signing onto a letter vowing not to advance legislation raising the debt limit “without substantive spending and budget reforms.”
At the same time, concerns are rising over how financial markets are faring amid the standoff, particularly after yields on Treasury bonds maturing next month jumped last week.
“The Treasury bills curve appears to imply risk of disruption in June, July, and October,” Goldman Sachs chief economist Jan Hatzius told investors days back.
“Investors are paying a healthy premium to own bills that mature in May while demanding hefty compensation to hold T-bills that are maturing in the first half of June,” analysts at Wells Fargo also told investors last week.
The Bipartisan Policy Center also warned on Tuesday that the federal government is on track to default on the national debt as soon as early next month, in line with earlier estimates from the Treasury Department and Congressional Budget Office.
