Biden and McCarthy will meet Tuesday to try to break the debt ceiling logjam

WASHINGTON — President Joe Biden and House Speaker Kevin McCarthy are scheduled to meet Tuesday afternoon to discuss a way to break the logjam on the debt ceiling, with fears of a self-inflicted economic calamity growing as Republicans demand spending cuts.

Failure to reach an agreement to lift the borrowing limit threatens the first-ever default on the nation’s $31.4 trillion debt, an outcome that could prove catastrophic for the U.S. economy and upend the political landscape.

Treasury Secretary Janet Yellen said in a letter Monday that the U.S. is still projected to exhaust all options to keep paying the country’s bills as early as June 1, leaving Congress with fewer than three weeks to avert a potential worst-case scenario.

“We just had our secretary say June 1 we could run out of money. We only have so many days left,” McCarthy, R-Calif., said Monday. “So, no, I don’t think we’re in a good place. I know we’re not.”

The meeting among Biden, McCarthy and other congressional leaders was postponed from Friday; some lawmakers said they wanted to give staff-level negotiators more time to develop a framework for the principals to discuss.

Biden met with McCarthy, Senate Majority Leader Chuck Schumer, D-N.Y., Senate Minority Leader Mitch McConnell, R-Ky., and House Minority Leader Hakeem Jeffries, D-N.Y., last Tuesday. Since then, White House and Capitol Hill staffers have held private meetings to consider a path forward, but they’ve been tight-lipped about the details of the negotiations. It’s unclear how much progress they have made.

Vice President Kamala Harris is also expected to join Tuesday’s meeting, which is scheduled for 3 p.m. ET, according to a source familiar with her plans.

Schumer insisted Monday that default must “be off the table.”

“Speaker McCarthy must commit to the same,” he said. “The consequences of default are too terrible.”

Biden has been reluctant to characterize the talks while they’re ongoing but said last week he is “certain” default can be averted, and he remained hopeful over the weekend.

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“I remain optimistic because I’m a congenital optimist, but I really think there’s a desire on their part as well as ours to reach agreement,” Biden said Sunday. “I think we’ll be able to do it.”

He didn’t respond when he was asked about his message for McCarthy.

The Republican-led House is demanding spending cuts and policy changes to lift the debt ceiling. Biden and the Democratic-controlled Senate insist that paying the bills is nonnegotiable and that next year’s budget should be dealt with separately.

With talks continuing and a deal not yet within reach, the timeline could throw into disarray Biden’s visit to Asia for meetings with his foreign counterparts.

Pressure to reach a deal is growing even as the two parties appear far apart.

A debt ceiling bill passed by House Republicans would cut the budget to fiscal year 2022 levels, slashing $131 billion from current spending. Democrats want to increase spending on health care, education and other domestic priorities, leaving the two sides to find other avenues for spending cuts; one possibility Biden and Republicans have floated is pulling back unspent Covid funds. Another possibility is reforms that would speed the process of getting permits for energy projects backed by the White House and centrist Sen. Joe Manchin, D-W.Va.

Still, Biden has continued to put pressure on Republicans, calling the looming default “a manufactured crisis” and insisting the responsibility falls on Congress to avoid it.

The White House has portrayed House Republicans as the only party to the talks willing to accept default as an outcome.

“Three of the four have said that we have to avoid default,” White House press secretary Karine Jean-Pierre told reporters Friday. “They’ve been very clear — we have to take default off the table. I will let you guess who was the fourth that did not say that.”

This article was originally published on NBCNews.com