By Julie Tsirkin, Kyle Stewart and Summer Concepcion — NBC News
After speaking with President Joe Biden by phone Sunday, House Speaker and California Republican Kevin McCarthy said they agreed to meet in person Monday afternoon to work toward a deal on raising the debt ceiling.
McCarthy and Biden discussed the debt ceiling in a call Sunday as the president flew back on Air Force One from the G-7 summit in Japan, after last week's negotiations between top White House aides and House Republicans failed to break an impasse.
"I think my conversation with the president was productive," McCarthy told NBC News after the call, adding that the president had requested to meet in person Monday and accepted the offer.
No significant progress in the meeting of both parties to raise the debt ceiling
May 20, 202300:22
"I think we can solve some of these problems," McCarthy said. "But I've been very clear with him from the beginning: We have to spend less money than we spent last year."
[Republican demand to tighten federal aid requirements hampers debt ceiling negotiation]
McCarthy said the two sides "remain distant" but that he and the president had decided during their call to reconvene their negotiators. "Let them inform the president, let him get some sleep. He wanted to meet personally tomorrow, I agreed, we would do it sometime in the afternoon," she said. "Time is of the essence."
A White House official confirmed Monday's upcoming meeting between Biden and McCarthy and said their teams will also meet again at 6 p.m. on Sunday to discuss outstanding issues.
McCarthy praised White House negotiators for holding "very professional" talks.
Debt Ceiling Talks May Put Millions' Health Insurance at Risk
May 19, 202300:22
"I have great respect for the people who are part of the president's team," he said. "They are brilliant, eloquent and know exactly what they are doing. We may disagree philosophically, but we respect each other, because we start from principles. And when you come from a place of beginnings, usually at the end of the day, you can find common ground and maintain your principles at the same time," he added.
[Social Security, Medicare, Federal Wages: Payments That May Be Delayed by Stalled Debt Ceiling]
The call between Biden and McCarthy came shortly after Treasury Secretary Janet Yellen said on NBC News' Meet the Press that early June is a "tough deadline" for the federal government to raise the debt ceiling and warned that bills will go unpaid if Congress doesn't reach a deal before the U.S. runs out of money.
"In my last letter to Congress I indicated that we expect not to be able to pay all our bills in early June and possibly as soon as June 1. And I will continue to report to Congress, but I certainly haven't changed my assessment," Yellen said. "So I think it's a tough deadline."
During a news conference in Japan on Sunday, the president urged Republicans to abandon "their extreme positions," which he criticized as "frankly unacceptable," in his opening remarks.
"It's time for Republicans to accept that there is no bipartisan agreement that can be reached solely on their partisan terms," he said, "they too have to move."
Republicans returned to the negotiating table over the debt ceiling late Friday after temporarily suspending talks with the White House, which they said were "not productive."
Part of the hurdle in the negotiations is that House Republicans want to force big spending cuts that Biden opposes and that fall short of the Democratic-controlled Senate.
They are reluctant to accept a spending cap lower than current levels, a source familiar with the party's stance told NBC News last week. The party may prefer to maintain current levels, even if it means a new spending deal fails and the government is on autopilot through continued resolution.
They protest in the capital for the dispute of the debt ceiling and another meeting to resolve it fails
May 16, 202302:40
Louisiana Republican Rep. Garret Graves, McCarthy's pick to lead negotiations with the White House, told reporters Sunday that "a lot of progress" has been made in discussions on the debt ceiling.
"If we go through the list of about 50 points, we see that we have come a long way," Graves said. "Understanding each other's positions, understanding the red lines. And that's why I think we've really been able to get closer, much closer than we were when we started."