by David Morgan and Nandita Bose

WASHINGTON (Reuters) – U.S. President Joe Biden and House of Representatives speaker Kevin McCarthy had a “productive” meeting on Monday but failed to reach an agreement on raising the U.S. debt ceiling , while the specter of a catastrophic payment default looms.

The Democratic White House tenant and top Republican representative in Congress are stepping up talks to try to find a compromise before June 1, the date from which, according to the US Treasury Department, the federal government could in the state no longer be able to make payments.

Kevin McCarthy is urging the White House to accept cuts to the federal budget that Joe Biden considers “extreme”. The Democratic president wants to introduce additional taxes that Republicans oppose.

Calling their hour-plus meeting “productive,” Joe Biden said in a statement that he had once again agreed with Kevin McCarthy that a “default (on debt) is out of the question and the only way forward. is in good faith towards a bipartisan agreement”.

Kevin McCarthy, for his part, told reporters that the negotiators would “meet and work all night” to try to find “common ground”.

“We had a productive discussion. We don’t have an agreement at the moment. I think we can still work it out,” he said, adding that he expected to speak with him daily. Joe Biden.

Kevin McCarthy has expressed his opposition to the Democratic president’s plan to reduce the US debt by raising the wealth tax and tightening tax regulations for the oil and pharmaceutical industries.

Any deal will need to be approved by both houses of Congress, which means it will need bipartisan support as Republicans control the House of Representatives and Democrats have a majority in the Senate.

(Reporting Richard Cowan, Nandita Bose and David Morgan, with contributions from Steve Holland, Tyler Clifford, Andrea Shalal, Eric Beech and Susan Heavey; Jean Terzian)

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