US President Joe Biden and House Speaker Kevin McCarthy met late Monday at the White House in order to hammer out a deal to raise the US debt ceiling, 10 days before current measures are set to expire.
McCarthy revealed after the highly-watched meeting that a deal was not yet reached between involved parties but admitted conversations proved “productive,” and that they were “better than any other time we’ve had discussions.”
"I did feel the discussion was productive in areas that we have differences of opinion," McCarthy said on Monday evening. "We're going to have the staff to continue to get back together and work on... some of the things that we had talked about."
In a subsequent statement, Biden agreed the get-together proved "productive" but acknowledged "areas of disagreement" remained in place for the time being.
"We reiterated once again that default is off the table and the only way to move forward is in good faith toward a bipartisan agreement," he said.
A potential default would not only put the US economy, as well as the world economy at risk, but it may specifically affect US cities with a large military presence. About 1/6 of US government spending goes to national defense, while a quarter of that spending goes to military personnel, meaning a default could shake the economies of several, if not all, US states.
“A default on the federal debt would be an economic disaster in many ways, but it will especially hit cities with high government employment, so military communities around the country are especially vulnerable,” John Mayo, professor of economics, business and public policy at Georgetown University, told US media.
Figures compiled from government data note there were at least 1.7 million Americans employed by the Defense Department at the end of March.
“These are middle-class families that have a high paycheck-to-paycheck living ratio. They don’t have a lot of extra income, don’t have a lot of savings and if the payments to those families are delayed, they’ll have to make really horrible choices.”
Ahead of the Monday meeting, McCarthy informed reporters that the negotiation process was “on the right path.” At the time, Biden echoed the sentiment and stated he believed the two would make some progress.
Though the tone of the meeting appears to be more optimistic than previously reported, the urgency for both parties to reach an agreement remain amid growing concerns of a potential economic crisis.
While the House of Representatives is scheduled to break for the upcoming holiday weekend, McCarthy announced he would keep the chamber in session for as long as it takes to pass a bill. “We’re going to stay and do our job,” he said.
Monday's meeting came as US Treasury Secretary Janet Yellen reiterated just how little time remained before "extraordinary measures" implemented by the agency would expire and see the US slowly begin to default. In an earlier meeting Yellen warned it was "highly likely" the US Treasury would not be able to foot its bills by early June without raising the debt ceiling.