Debt limit discussions are said to be resuming Sunday night between White House officials and House Speaker Kevin McCarthy’s staff ahead of McCarthy and President Joe Biden themselves meeting Monday.
This comes as time is running out to reach a deal to avoid a potentially devastating default, something that has never happened before.
While Democrats are for raising the debt ceiling, Republicans want to see steep spending cuts to go along with it, something President Biden has conceded to, but the two sides are not on the same page on what to put on the chopping block.
"It’s time for Republicans to accept that there’s no bipartisan deal to be made solely on their partisan terms. They have to move as well," said President Biden.
The Treasury Department projects the U.S. will be unable to pay its bills by as early as June 1.
If it comes to that, it would be the first since the debt ceilingwas created in 1917.
Leaders say a default would have "catastrophic" consequences for the U.S. economy.
Millions of people could stop getting social security payments; military members and government workers may not get paid; and food assistance programs could also stop.
"The stakes could not be higher. A default would plunge our economy into recession. Economists estimate that millions of Americans could lose their jobs. Hardworking families could lose their retirement savings," said White House Press Secretary Karine Jean-Pierre.
At least 11 Democratic senators are urging President Biden to invoke the 14th Amendment. They say it would allow him to raise the nation’s debt limit without Congress.
SEE MORE: Where both sides of the aisle stand on unemployment, debt debate
Treasury Secretary Janet Yellen said on NBC’s "Meet the Press" Sunday that the 14th Amendment doesn’t look like an option given the legal uncertainty around it and tight timeframe.
Yellen is also saying it would be unacceptable for the U.S. not to pay its bills.
"We take the debt ceiling seriously as a constraint on our ability to pay bills that are coming due. And my assumption is that if the debt ceiling isn’t raised, there will be hard choices to make about what bills go unpaid," said Yellen.
But Republicans aren’t letting up on spending cuts.
"Our debt is larger than our economy by more than 20%. If we do nothing, we will pay more in interest in the next ten years than we paid in the last 83," said McCarthy.
In their negotiations, Republicans want to implement work requirements to qualify for the Medicaid program, even though the Biden administration has said it could cause millions to lose coverage. They also want to see cuts in IRS money.
Negotiations are set to continue Monday.
The debt limit has been raised dozens upon dozens of times before.
It was raised three times under former President Donald Trump without any spending cuts from Republicans.
Also, raising the debt limit doesn’t authorize any new spending; it simply allows the U.S. government to pay off existing obligations.
SEE MORE: What is the debt ceiling? How defaulting could affect Americans
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