Debt ceiling negotiations stalled after Biden meeting with McCarthy

President Joe Biden has been considering using the 14th Amendment to unilaterally raise the debt ceiling without the help of Congress, he said Tuesday after his meeting with congressional leaders.

However, he implied that the process of litigation may take too long to make a difference. 

Tribe is a legal scholar who is a professor emeritus at Harvard Law. This week he published an opinion piece in the New York Times headlined: Why I Changed My Mind on the Debt Limit."

“I don’t think that solves our problem now,” Biden said, adding he may reexamine in the long run. 

“I'll be very blunt with you, when we get by this, I'm thinking about taking a look at, months down the road, as to see whether what the court would say about whether or not it does work,” Biden said. 

The president was also asked about other concepts such as minting a trillion-dollar coin. He responded: “I don’t think anybody has studied the minting of the coin issue.”

More context: While the 14th Amendment is a theoretical workaround, experts have said the president unilaterally issuing debt without a ceiling increase would prompt a constitutional crisis and create severe uncertainty leading to an economic and financial crisis regardless. Previous administrations have deemed such a move as unworkable.

“There is no way to protect our financial system and our economy other than Congress doing its job and raising the debt ceiling,” Treasury Secretary Janet Yellen said.

Deputy Treasury Secretary Wally Adeyemo also tamped down the feasibility of using the 14th Amendment when asked about it Sunday, saying the only way to “guarantee” that the US can pay its bills is to raise the debt ceiling.

CNN's Sam Fossum contributed to this post.

President Joe Biden pushed back against the idea of the US defaulting following a meeting with top congressional leaders about raising the federal debt limit at the White House Tuesday.

Biden said that he agreed with Senate Minority Leader Mitch McConnell's pledge that the US would not go into default. "He's absolutely correct."

The president said that congressional leaders will continue their discussions and meeting again Friday.

"In the meantime, our staffs are going to meet today and daily between now and then. And everyone at the meeting understood the risk of default. Our economy would fall into a significant recession," he said.

Senate Democratic Leader Chuck Schumer slammed House Speaker Kevin McCarthy Tuesday for refusing to take the prospect of default off the table in negotiations over legislation to raise the nation’s debt limit.

The Senate majority leader told reporters that the speaker was endangering America, following a meeting with congressional leaders and President Joe Biden.

Schumer pointed to comments from his Republican counterpart, Senate Minority Leader Mitch McConnell, that indicated House Republicans’ debt limit proposal was unlikely to pass a Democratic-controlled chamber as evidence McCarthy must seek bipartisan support for a debt limit hike.

“Mitch McConnell himself has said that the speaker has to come to some kind of agreement with the president, and said that the Senate is never going to pass the House bill,” he said, telling reporters the GOP proposal “doesn’t have a single Democrat in support, and it gets us nowhere, because you have to negotiate to get this done.”

House Democratic Leader Hakeem Jeffries said some progress was made during the meeting with Biden. 

“We had an honest, frank discussion about a path forward, and President Biden urged us to get together — either later on today or tomorrow — our respective teams, to have a discussion about a path forward around the budget and the appropriations process, and everyone agreed,” Jeffries said. “That’s progress.”

Biden is set to meet with congressional leaders again to discuss the federal debt ceiling on Friday, according to McCarthy.

Senate Minority Leader Mitch McConnell returned to the Senate following the White House meeting over the debt ceiling describing the situation was "just like 2019" and calling on President Joe Biden to strike a deal with House Speaker Kevin McCarthy.  

McConnell recalled the situation in 2019 when Republicans controlled the White House and the Senate while Democrats had the House. 

"The way the deal finally came together is when I told President Trump, even though he was not excited about it, he had to reach a deal with Nancy Pelosi," McConnell said.

He said this is what Biden must do with McCarthy. 

McConnell also pledged that the US will not default.

Meanwhile, McCarthy said that he has done everything in his power to prevent a default and did not take that possibility off the table.

CNN's Nikki Carvajal and Jeremy Diamond contributed to this report.

President Joe Biden and congressional leaders maintained their positions on a potential debt ceiling deal after they met on Tuesday at the White House, House Speaker Kevin McCarthy said.

Following the meeting between top congressional leaders and the president, McCarthy said that there was no progress made in reaching a deal.

The speaker added that he believes that Biden should engage in good-faith negotiations about spending. Biden has said that he's willing to have conversations about spending cuts, but not with a potential default on the line.

Treasury Secretary Janet Yellen notified lawmakers last week that the US could default on its debt by June 1. Yellen and Deputy Treasury Secretary Wally Adeyemo both painted a stark picture of “economic chaos” if the debt ceiling isn’t lifted.

Tuesday’s meeting – comprised of McCarthy, Senate Minority Leader Mitch McConnell, House Minority Leader Hakeem Jeffries, Senate Majority Leader Chuck Schumer, as well as a handful of congressional and White House aides – marked the first in-person, top-level discussions on the matter at the White House in months.

House Speaker Kevin McCarthy told reporters Tuesday that he and top lawmakers will meet again with President Joe Biden on Friday, following their meeting at the White House on the debt ceiling. 

“The staff will get together, and we’ll get back together, the principals on Friday,” McCarthy said following their meeting. 

President Joe Biden and House Republicans have as little as a month to prevent the US from defaulting on its debt, which would impact millions of Americans and unleash economic and fiscal chaos here and around the world.

Treasury Secretary Janet Yellen warned last week that the government may not be able to pay all of its bills in full and on time as soon as June 1.

Here are just three ways that Americans could be affected by debt default:

Social Security payments: Payments to about 66 million retirees, disabled workers and others receive monthly Social Security benefits could be delayed in a debt default scenario, though it’s possible Treasury could continue making on-time payments because of the entitlement program’s trust fund, said Shai Akabas, director of economic policy at the Bipartisan Policy Center.

Almost two-thirds of beneficiaries rely on Social Security for half of their income, and for 40% of recipients, the payments constitute at least 90% of their income, according to the National Committee to Preserve Social Security and Medicare.

Other government payments could also be affected, including funding for food stamps; federal grants to states and municipalities for Medicaid, highways, education and other programs.

Federal employees and veterans benefits: More than 2 million federal civilian workers and around 1.4 million active-duty military members could see their paychecks delayed. Federal government contractors could also see a lag in payments, which could affect their ability to compensate their workers.

Also, certain veterans benefits, including disability payments and pensions for some low-income veterans and their surviving families, could be affected.

The economy: A debt default could trigger an economic downturn, which would prompt a spike in unemployment. It would come at a particularly fragile time — when the nation is already dealing with rising interest rates and stubbornly high inflation.

How much damage would be done would depend on how long the crisis continues. If the default lasts for about a week, then close to 1 million jobs would be lost, including in the financial sector, which would be hard hit by the stock market declines. Also, the unemployment rate would jump to about 5% and the economy would contract by nearly half a percent, according to Moody’s.

“It would be a body blow to the economy, and it would be a manufactured crisis,” said Bernard Yaros, an economist at Moody’s.

Read more about how the debt default could affect you here.

President Joe Biden was tightlipped ahead of a meeting with all four congressional leaders on Tuesday, only telling reporters in the Oval Office during a brief photo-op that the leaders would take questions later.

Biden was seated in the center of the room, closer to Senate Majority Leader Chuck Schumer and House Minority Leader Hakeem Jefferies.

Seated opposite from them were House Speaker Kevin McCarthy and Senate Minority Leader Mitch McConnell. 

When reporters entered the room, one joked that they were “very civilized” when walking in. 

“You’re setting a great example for us,” the president quipped.

House Speaker Kevin McCarthy said they will need a deal in principle to lift the limit by next week. 

“I think we need it by next week,” McCarthy told CNN. 

When pressed by CNN on what his message is today at the White House he said it’s the “same message I gave 97 days ago.” 

“I would hope he would be ready to negotiate, he has wasted 97 days,” he added. 

McCarthy blamed President Joe Biden for delay and putting the country in jeopardy, saying, “he’s treated this just like he’s treated the border. Ignored the problem, not it’s a major problem.” 

“I think we should just on the room and solve this thing. I don’t think it’s that difficult," the Republican said.  

CNN’s Manu Raju pressed McCarthy on his level of optimism heading into the White House meeting. “I had a much higher expectation 97 days ago… he told me one thing and did another,” McCarthy said. 

McCarthy told CNN he was the one that requested the staff level meeting ahead of the negotiations. 

“It’s not something they requested, it’s not something they looked at. So I still don’t know how serious they are taking this," he added.