What Each Side Wants Out of the Debt Limit Fight

President Joe Biden and House Speaker Kevin McCarthy (R-Calif.) are entering a crucial stretch this week to make a breakthrough in their debt limit negotiations as Washington careens toward a potential June 1 default.

Biden and McCarthy are scheduled to meet in the Oval Office Monday at 5:30 p.m. as they race to strike a deal that can pass both chambers with bipartisan support and reach the president’s desk in the next 10 days, when the Treasury Department has warned the U.S. could face a catastrophic default on its debt. 

The two most recently met in person last Tuesday and spoke by phone on Sunday. McCarthy called the call "productive" and Biden confirmed it "went well" upon returning to Washington from the G7 Summit in Japan. Negotiators for the White House and the House GOP met for several hours at the Capitol on Sunday night and again on Monday, with no signs of a breakthrough.

Republicans are pushing for budget caps, stricter work requirements for some welfare programs, permitting reform and to claw back unspent COVID-19 money in exchange for lifting the debt ceiling until next year.

Biden and other Democrats have pushed back against the work requirements the GOP is calling for, and they want to raise the debt limit for two years to avoid a repeat of this fight before the 2024 elections.

Here are where things stand now:

Where the White House is: While Biden had called on Congress for months to pass a clean bill to raise the debt ceiling without cutting costs, the president in recent weeks has advocated to find a bipartisan deal to raise the debt limit before the June 1 deadline.

Biden last week said that he would not support stricter work requirements for programs if it has an “impact on medical health or needs of people.” He did leave the door open on some work requirements being modified but said they would not be anything of “consequence.”

Biden also said he is "willing to cut spending," but that what Republicans are calling for is “simply, quite frankly, unacceptable.”

The president reiterated his confidence that the two sides can reach an agreement in a tweet Sunday: "America has never defaulted on its debts. And it never will."

Where House Republicans are: The House is expected to vote on any agreement before the Senate, which is in recess this week, returns to Washington. But House Republicans have a rule where members of Congress and the public must have 72 hours to review legislation before a floor vote can occur. 

Rep. Garret Graves (R-La.), McCarthy's lead negotiator, has said reducing spending levels in the next fiscal year is a "red line."

McCarthy has faced renewed pressure from his right flank in recent days, with the House Freedom Caucus stating there should be no further negotiations until the Senate passes the bill the House approved last month to tie a debt limit increase to federal spending cuts. The group called on McCarthy and Senate Republicans “to use every leverage and tool at their disposal” to make that legislation law. The dozens of Freedom Caucus members will likely all oppose any bipartisan agreement.

Some GOP members have also pressured McCarthy to include immigration-related proposals as part of the talks. But McCarthy told reporters Sunday that he rejected that idea. A White House official said it’s “encouraging to learn this is off the table again.”

Where House Democrats are: While Biden and McCarthy are now taking the lead in talks, House Democrats’ votes will still be critical to pass any legislation. 

The Congressional Black Caucus, a powerful voting bloc among House Democrats, all but drew a red line last week, warning that its members have “no intention of allowing families to go hungry to appease Republicans.” The CBC warned any GOP proposal to cut Medicaid, Temporary Assistance for Needy Families and food stamps or change eligibility requirements “is cruel and ill-advised.”

Where Senate Republicans are: Led by Minority Leader Mitch McConnell (R-Ky.), Senate Republicans are standing with McCarthy and their House Republican counterparts. McConnell reiterated in a tweet Friday that Biden and McCarthy “are the only two who can reach an agreement.”

Where Senate Democrats are: Senate Majority Leader Chuck Schumer (D-N.Y.) has said the Senate would vote after the House if a deal comes together. And while his members are on recess this week, he said every senator should be able to return to Washington on 24 hours’ notice to begin consideration of any legislation. 

A group of Senate Democrats, led by Sen. Bernie Sanders (I-Vt.), is pressuring Biden from the left, urging the president to act on his own to raise the debt ceiling using the 14th Amendment. Biden said Sunday that he believes he has the authority to go that route, but questioned if the issue could be resolved in time to avoid a default.