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US President Joe Biden is on his way back from the G-7 summit in Japan to Washington, DC, where on Monday he plans to meet with House Speaker Kevin McCarthy to iron out a compromise over the debt ceiling. Biden nixed the last two legs of his trip — to Papua New Guinea and Australia — to join the talks in the hope of avoiding a catastrophic default as early as June 1.
With that hard deadline fast approaching, the two sides have moved a bit closer yet remain far apart. Republicans want sweeping spending cuts, including work requirements on beneficiaries of food stamps, while the Dems are offering to keep defense spending flat. McCarthy is under as much pressure to not cave from the penny-pinching far right of the GOP as Biden is from free-spending progressives.
The fact that the president — who for months has refused to join the debt ceiling talks — is meeting McCarthy for the second time in two weeks signals that the White House can no longer delay nor expect to get a deal without giving up something. Still, as Eurasia Group's US Managing Director Jon Lieber points out, that won't matter as long as enough Republicans believe that the US can stave off a default by choosing to pay off some creditors and not others.