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Joe Biden will cut short a planned overseas trip and return to Washington on Sunday, after Speaker of the House Kevin McCarthy offered the first hint that lawmakers were moving towards a deal to raise the debt ceiling and avert an unprecedented government default.
The US president is set to depart on Wednesday for G7 meetings in Japan. He had originally been scheduled to travel on to Papua New Guinea and Australia, but those plans have been scrapped, the White House said Tuesday.
The change in plans came as Biden met the four top members of Congress — Republicans McCarthy and Mitch McConnell and Democrats Chuck Schumer and Hakeem Jeffries — in the Oval Office on Tuesday to try and make progress on a potential deal to raise the debt ceiling and avert default.
All parties were cautiously upbeat after the hour-long meeting.
The White House called the conversation “productive” and “direct”, adding Biden was “optimistic that there is a path to a responsible, bipartisan budget agreement if both sides negotiate in good faith and recognise that neither side will get everything it wants”.
Staffers would continue to meet daily to hash out a deal, the White House said, and Biden would speak to the congressional leaders by phone while he is travelling, before reconvening in person when he is back in Washington.
McCarthy, who has struck a more pessimistic tone in recent days, was more circumspect. He told reporters that while he was not more “optimistic”, the conversations had been “productive”.
The Speaker added it was “possible to get a deal by the end of the week”, but cautioned: “We have got a lot of work to do in a short amount of time.”
The White House began formal talks with congressional leaders last week in an effort to reach a deal before the Treasury runs out of money and is unable to meet its obligations. Janet Yellen, the Treasury secretary, has said the so-called X-date could come as soon as June 1.
Earlier on Tuesday, more than 140 leaders of the biggest US companies, including Goldman Sachs, Pfizer and KKR, warned that not raising the debt ceiling could lead to a “potentially devastating scenario”.
In an open letter to Biden and congressional leaders, executives from a wide range of leading businesses and investment firms warned a failure to raise the debt ceiling could have “disastrous consequences” for the US economy.
“We write to emphasise the potentially disastrous consequences of a failure by the federal government to meet its obligations,” the signatories wrote. “Absent a resolution, the government is likely to run out of money as soon as June 1. Action to end the pending debt crisis is necessary now.”
The letter was organised by the Partnership for New York City, a group co-chaired by Albert Bourla, chair and chief executive of Pfizer, and Rob Speyer, president and chief executive of Tishman Speyer, the real estate group. It was signed by executives representing broad swaths of corporate America from companies including airline JetBlue, glasses retailer Warby Parker and media group Condé Nast.
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