Just before leaving on Wednesday for a diplomatic mission to Asia, President Biden expressed his confidence that “America will not default” as congressional leaders from both parties showed some signs of hope that an agreement to extend the country’s borrowing limit would eventually be reached.
“Every leader in the room understands the consequences if we failed to pay our bills,” Mr. Biden said at the White House on Wednesday before leaving for Hiroshima, Japan, to attend the Group of 7 meeting there. “And it would be catastrophic for the American economy and the American people.”
Democrats and Republicans both agreed that the United States cannot default, according to Mr. Biden, who described his face-to-face meeting with congressional negotiators the day before as fruitful, “civil, and respectful.”
However, his choice to have the last word in the talks sent a message that the White House is committed to preventing a domestic economic disaster even as he leaves for a summit on the global economy.
In order to be present for the “final negotiations” over the ceiling, the legal limit on the amount of borrowing the government is permitted to do in order to pay its commitments, Mr. Biden made the decision to cut short his trip to Asia. He will forgo planned trips to Papua New Guinea and Australia in order to return to Washington on Sunday.
Following the meeting on Tuesday, Mr. Biden mirrored the confidence expressed by Democratic and Republican leaders.
He has asked Shalanda Young, the director of the Office of Management and Budget, and Steve Ricchetti, his senior assistant, to address a group of negotiators on behalf of congressional Republicans. On Tuesday, Speaker Kevin McCarthy praised the action as a sign of development.
Mr. Biden stated that the teams involved in the negotiations met on Tuesday night and will do so once more on Wednesday. “We narrowed the group to meet and hammer out our differences,” he added.
There is not much more time for the two sides to come to an agreement.
On January 19, the government’s debt reached the $31.4 trillion ceiling. Since then, the Treasury Department has been paying its obligations through a variety of accounting tricks. Treasury Secretary Janet L. Yellen reaffirmed that if Congress does not increase or suspend the debt ceiling, the United States could run out of money to pay its debts by June 1 and that this could lead to a recession or the loss of employment.
While Mr. Biden has stated that negotiations over the spending reductions must not be a condition for raising the debt ceiling, Republicans have stated that they want to reduce federal spending before raising the ceiling. Nevertheless, Democrats have come seen as more amenable to forging a deal with Republicans. Senator Chuck Schumer, the majority leader, and Representative Hakeem Jeffries, the minority leader, both from New York, told reporters that the only way to move forward was to pass a bipartisan bill in both chambers.
Over the weekend, Mr. Biden gave a hint that he would be open to a deal on stronger work requirements for government aid programs when he told the press that as a senator, he had supported such measures with the exception of Medicaid.
When questioned on the subject on Wednesday, Mr. Biden responded that it is plausible, “but not anything of any consequence.”
Mr. Biden declared, “I’m not going to accept any work requirements that will affect people’s needs for medical care.”
Mr. Biden continued by saying that he did not think cutting short his overseas trip would aid China in gaining power in the area. The government has worked to strengthen regional alliances in an effort to challenge China’s economic influence. But Mr. Biden had to skip trips in Australia and Papua New Guinea due to the continuing negotiations.
According to Mr. Biden, he made care to call Australian Prime Minister Anthony Albanese on Tuesday to inform him of his decision to postpone a portion of his trip. According to a source familiar with the situation, when administration officials were still debating whether to curtail the trip, they also talked about sending a replacement, such as Vice President Kamala Harris or Secretary of State Antony J. Blinken.
There were no such arrangements to deploy a replacement as of Wednesday morning.