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McCarthy and Schumer optimistic about the state of debt talks

<i>Saul Loeb/AFP/Getty Images</i><br/>President Joe Biden speaks during a meeting on the debt limit with House Speaker Kevin McCarthy
Saul Loeb/AFP/Getty Images
President Joe Biden speaks during a meeting on the debt limit with House Speaker Kevin McCarthy

By Maegan Vazquez, Manu Raju, Haley Talbot and Nicky Robertson, CNN

(CNN) — Two days after his second recent meeting in the Oval Office to discuss raising the debt ceiling, House Speaker Kevin McCarthy sounded positive about the direction of debt limit talks, telling CNN he sees how they can get to a deal and that he wants a bill on the floor next week.

After Tuesday’s meeting with President Joe Biden, Vice President Kamala Harris and congressional leaders from both parties, McCarthy and the president agreed to more direct talks between their two teams. Those direct talks, McCarthy said, have made a positive difference.

The speaker said he’s spoken to Senate Majority Leader Chuck Schumer about the timing in the House and Senate to pass a bill to avert default, saying it would take four days in the House and seven in the Senate.

“We’re not there … but I see the path,” McCarthy told CNN’s Manu Raju on Thursday, adding that it would be “important” to have an agreement “by sometime this weekend.”

Asked if that was possible, McCarthy responded, “We are not there, we haven’t agreed to anything yet but I see the path that we can come to an agreement. We have a structure now.”

“I just believe where we were a week ago and where we are today is a much better place because we’ve got the right people in the room discussing it in a very professional manner with all the knowledge and all the background from all the different leaders and what they want,” McCarthy added.

McCarthy also praised the White House negotiators, Office of Management and Budget Director Shalanda Young and top White House aide Steve Ricchetti. Negotiators for each team have been meeting daily since Tuesday’s meeting. They met for more than two hours at the Capitol on Thursday.

After the meeting, North Carolia GOP Rep. Patrick McHenry told reporters that conversations have been productive, but “we’ve got a lot more work to do. Nothing is close to being done.”

“But the right things are being discussed … with the right people in the room to get this to the point where the principals can meet and have some agreement,” McHenry added.

On the Senate floor on Thursday, Schumer also seemed optimistic about the debt negotiations. And in a further sign that talks may be progressing, he announced that the Senate will keep its week-long recess – which was in danger of being canceled before talks seemed to take a more positive turn.

“I am hopeful that soon both sides will find an agreement that keeps default completely off the table. We made good progress this week. But the work continues,” Schumer said in his opening remarks ahead of the recess, underscoring that there must be a bipartisan agreement.

“I’m also pleased that the other side has recognized the best way forward is a bipartisan piece of legislation that can secure enough votes to get through both the House and the Senate. Partisan legislation just won’t produce the result we need,” he added.

While talks appear to be progressing between congressional leadership and the White House, many members of Congress remain divided over whether concessions should even be on the table.

As talks were at a standstill over the last three months, Biden insisted negotiations for the budget be detached from conversations to raise the debt ceiling and avoid default. Democrats argue that Republicans are unfairly using the nation’s credit as leverage in order to attain their proposed budget cuts.

Several Democrats have specifically expressed concerns about Republicans’ proposed enhancement of work requirements for social safety net programs, with some leading Democrats suggesting the inclusion of the requirements is a red line in negotiations. Biden has said he would not put consequential work requirements on the table for negotiations.

On the other side of the aisle, the House Freedom Caucus – a band of roughly 40 hardline conservatives – adopted an official position in the debt ceiling negotiations on Thursday, calling on McCarthy to reject anything less than the House GOP’s debt ceiling proposal.

Their position is a sign of the challenges McCarthy will face in selling any White House-negotiated deal to his right flank, even as GOP leaders have tried to temper expectations internally and frame the House-passed bill as just an opening offer.

Invoking the 14th Amendment

Democrats are divided over whether the president should invoke the 14th Amendment to allow Treasury to borrow above the debt ceiling to pay the nation’s obligations.

Were Biden to invoke the 14th Amendment in this regard, it would almost certainly prompt a constitutional crisis and swift legal action.

While the president has said he doesn’t think invoking the 14th Amendment would solve the current problem, he has said he is exploring whether it could be used in the future.

“I’ll be very blunt with you, when we get by this, I’m thinking about taking a look at, months down the road, as to see whether what the court would say about whether or not it does work,” Biden said last week.

Progressives are warning Biden not to cave to McCarthy demands on debt ceiling and urging him to consider using the untested legal theory to unilateral avoid the nation’s first-ever debt default.

Ten Democratic senators, along with Vermont Sen. Bernie Sanders, issued a letter to the president on Thursday calling on him to invoke the 14th Amendment.

“We write to urgently request that you prepare to exercise your authority under the 14th Amendment of the Constitution, which clearly states: ‘the validity of the public debt of the United States … shall not be questioned,’” the letter says. “Using this authority would allow the United States to continue to pay its bills on-time, without delay, preventing a global economic catastrophe.”

Rep. Jamie Raskin, the Maryland Democrat, said that Biden is required to follow the 14th Amendment to ensure all debts are paid for if there’s no deal on a debt limit.

“He needs to respect the 14th Amendment in the (way the) whole country does,” Raskin said. “Congress has to as well. I’m calling on my Republican colleagues to pull back from this very dangerous political game they’re playing. No Congress has ever brought the country to the point of a default like this.”

Sanders told reporters on Thursday that he has spoken to the White House about the potential use of the 14th Amendment, but said that it was a “private conversation” and did not elaborate.

Several senators from both parties have expressed concerns over the proposed move to invoke the 14th Amendment.

Senate Majority Whip Dick Durbin warned that 14th Amendment talks may throw a wrench in negotiations.

“As far as the long-term issue on the 14th Amendment, I think it’s a legitimate constitutional question, but inserting it into the process now tosses this into the courts and God knows when it ends,” Durbin said.

GOP Sen. John Cornyn of Texas, called the potential use of the 14th Amendment to avoid the debt ceiling “ridiculous.”

“It’s just a way to avoid responsibility. I mean, unfortunately, that happens a lot around here. There’s we need to hold people accountable for doing their jobs,” Cornyn said Thursday.

“I think that we need to rethink its requirements of our job,” Sen. Richard Blumenthal, a Connecticut Democrat, told reporters when asked about the potential use of the 14th Amendment.

Harris warns about the consequences of default

Biden departed Washington on Wednesday for a G7 meeting in Japan, announcing before his trip that he would be postponing two legs of his trip – to Papua New Guinea and Australia – in order to return to the US on Sunday for debt negotiations.

The president told reporters he would “be in constant contact with my team while I’m at the G7 and (I will) be in close contact with (House Speaker Kevin) McCarthy and other leaders as well,” during his travel abroad.

While Biden was away from the White House, Harris led a call on Thursday to warn about the consequences of a default, saying it “could trigger a recession, stop military paychecks and raise interest rates for years to come.”

“All of this is obviously unacceptable. … We believe it is absolutely unnecessary,” Harris said. “This does not have to be a crisis, our position is clear and simple: Congress must act to prevent default. … America must pay our bills, just like you and your family and other hardworking Americans do every single day.”

The vice president blasted congressional Republicans for what she said was threatening to hold the nation’s debt hostage over calls to reduce the deficit.

“Let’s be clear for Republicans in Congress. This issue is not really about lowering our nation’s debt, because if they really cared about lowering our debt, they would not they would not also fight to protect trillions of dollars in Trump tax cuts for the wealthiest Americans and the biggest corporations,” she said.

This story has been updated with additional developments.

™ & © 2023 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.

CNN’s Lauren Fox, Morgan Rimmer, Donald Judd, Tami Luhby and Melanie Zanona contributed to this report.

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