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U.S. President Joe Biden talks with House Speaker Kevin McCarthy at the Capitol, in Washington, on March 17.Evan Vucci/The Associated Press

U.S. President Joe Biden and top lawmakers appeared unable on Tuesday to break a deadlock over raising the $31.4 trillion U.S. debt limit despite a face-to-face meeting three weeks before the country may be forced into an unprecedented default.

After about an hour of talks in the Oval Office, Biden, a Democrat, and House of Representatives Speaker Kevin McCarthy, a Republican, showed no signs of softening their positions as a default looms as early as June 1.

“I didn’t see any new movement,” McCarthy told reporters after the meeting, complaining that Biden didn’t agree to talks until time was running out. “That’s not a way to govern,” he said. The White House, he said “has no plan B.”

But he said the two sides agreed for their staff to get together this week, and for the principals to meet again on Friday to continue talking. Mitch McConnell, the Senate minority leader, told reporters that there would be no debt ceiling increase without a cut in spending.

Biden was expected to offer his own version of the meeting later on Tuesday.

Economists warn that a lengthy default could send the American economy into a deep recession with soaring unemployment while destabilizing a global financial system built on U.S. bonds. Investors are bracing for impact.

Biden is calling on lawmakers to raise the federal government’s self-imposed borrowing limit without conditions. McCarthy has said his chamber will not approve any deal that doesn’t cut spending to address a growing budget deficit and signalled that he doesn’t see a short-term fix.

Past debt ceiling fights have typically ended with a hastily arranged agreement in the final hours of negotiations, thus avoiding a default. In 2011, the scramble prompted a historic downgrade of the country’s top-notch credit rating. Veterans of that battle warn the current situation is riskier because political divides have widened.

Tuesday’s meeting was closely watched ahead of what’s expected to be an increasingly fraught period in Washington, ahead of June, when the U.S. Treasury predicts the country could be forced to default on some debts.

McCarthy, whose party holds only a slim majority in the House, wants to tie a vote on the debt ceiling to broad spending cuts the White House considers draconian.

Biden’s meeting with the speaker was their first since Feb. 1.

Earlier Tuesday, McCarthy and the White House separately appeared to close the door to a short-term solution that’s been widely discussed on Capitol Hill: lifting the debt ceiling through September to allow more time for agreement.

The U.S. Chamber of Commerce, the nation’s largest business association, on Tuesday urged a “swift” bipartisan agreement on the debt limit that would also include energy project permitting reform and an agreement on discretionary spending caps.

Few countries in the world have debt ceiling laws, and Washington’s periodic lifting of the borrowing limit merely allows it to pay for spending Congress has already authorized.

Biden would agree to a separate discussion on the budget but not tied to the debt ceiling, the White House said.

The start of active talks could nonetheless soothe the nerves of investors who last week forced the federal government to pay its highest interest ever for a one-month debt issue.

Prices for short-term Treasury bills fell on Tuesday as investors sold off debt that could come due around the time the U.S. debt limit could be hit.

Biden’s foreign travel plans and House and Senate recesses mean there are just seven days when all three parties are scheduled to be in town before June 1.

Treasury Secretary Janet Yellen on Monday said a failure to raise the debt limit would hurt the U.S. economy and weaken the dollar as the world’s reserve currency. Treasury cash is dwindling as the extraordinary measures it is taking are exhausted.

White House officials have discussed whether Biden has the authority to lift the debt limit on his own by invoking the U.S. Constitution’s 14th amendment, but Biden told MSNBC last week that “I’ve not gotten there yet” on this argument.

The 14th amendment says the validity of the public debt of the United States “shall not be questioned.” Invoking it could trigger a legal challenge.

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