Progress made in White House debt limit meeting, talks to continue as U.S. rushes to prevent default

WASHINGTON — President Joe Biden and House Republicans remained far apart Tuesday, following an hour long meeting on the debt ceiling in the Oval Office that all four top congressional leaders attended.

But attendees said they made progress, including through an agreement to turn the multilateral debt limit negotiations into direct one-to-one talks between a close ally of House Speaker Kevin McCarthy and two White House aides, on Biden's behalf.

"That doesn't mean we're going to get to an agreement," McCarthy told reporters after the meeting, but he said there was "now a better process" overall.

Biden told reporters he is often tasked with addressing multiple things at once, and he feels confident the negotiations will progress even as he attends the G-7 summit.

"There's still work to do but I made it clear to the speaker and others that we'll speak regularly over the next several days and the staffs' going to continue meeting daily to make sure we do not default," Biden told reporters after the meeting.

The White House said Biden "directed staff to continue to meet daily on outstanding issues. He said that he would like to check in with leaders later this week by phone, and meet with them upon his return from overseas."

"There was an overwhelming consensus I think in today's meeting with congressional leaders that defaulting on the debt is simply not an option," Biden told reporters.

The president said he was disappointed congressional Republicans have been unwilling to discuss "raising revenues" but progress is being made.

It was "a good and productive meeting," said Senate Majority Leader Chuck Schumer, D-N.Y., who noted that it was "more cordial" than a previous meeting last week.

"Having a bipartisan bill in both chambers is the only way ... we're going to avoid default," Schumer said.

The White House also said Tuesday that it would cancel the second leg of the president's upcoming international trip, given the delicate state of the debt ceiling negotiations.

Biden is currently scheduled to depart Wednesday for Japan, where he will attend the G-7 summit. He will now return to the U.S. on Sunday immediately after the meeting ends, and will not make planned visits to Papua New Guinea and Australia, a source familiar with Biden's trip planning told NBC News.

His return will set up a critical stretch in the efforts to avoid a first-ever default on U.S. debt and prevent major economic damage.

Biden and Vice President Kamala Harris met Tuesday with McCarthy, Minority Leader Hakeem Jeffries, D-N.Y., Senate Majority Leader Chuck Schumer, D-N.Y., and Minority Leader Mitch McConnell, R-Ky. McCarthy said his side would be represented in the ongoing talks by his close ally in the House, Rep. Garrett Graves, R-La., and that the White House would deploy Shalanda Young, director of the White House Office of Management and Budget, and Steve Ricchetti, one of Biden's closest advisors in the West Wing.

In recent days, stricter work requirements for social safety net programs have emerged as a potential area of compromise.

The work restrictions for social programs are a key demand of House Republicans, who included them in a partisan debt limit bill that passed that chamber last month.

"The public wants it," McCarthy said Tuesday, citing a recent ballot initiative in Wisconsin. "Both parties want it, the idea that [Democrats] want to put us into a default because they will not work with us on that is ludicrous to me."

But the issue is also a red line for some progressive Democrats, a fact that could scramble the vote math of any debt limit deal that could pass the House.

Increasing the current work requirements for federal assistance programs are "a nonstarter for me," said Rep. Ro Khanna, a California Democrat and member of the Congressional Progressive Caucus, on MSNBC.

"It's just cruel, especially as we see the slowing down of the economy," Khanna said. "I'm hopeful the president will stick to what he said, that we pay our debts and then we can negotiate on the budget."

Over the weekend, Biden answered a question about the work requirements by pointing to his own Senate record of voting for welfare work requirements in the 1990s.

"I voted for tougher aid programs, that's in the law now, but for Medicaid it's a different story," Biden said Sunday in Rehoboth, Del. "And so I'm waiting to hear what their exact proposal is."

A Republican bill passed last month included stricter work requirements not only for Medicaid, but for the Temporary Assistance to Needy Families, or TANF, funds, as well as Supplemental Nutrition Assistance Program food stamps.

The White House reiterated Tuesday that Biden would reject at least some of the proposed work requirements.

Biden "will not accept proposals that will take away people's health coverage," said White House press secretary Karine Jean-Pierre. She did not say, however, that he would not accept changes to food stamps or temporary assistance programs.

This is a developing story, please check back for updates.