LAURA BARRON-LOPEZ: Debt ceiling stalemate and Biden makes it official.

REP. KEVIN MCCARTHY (R-CA): We lifted the debt limit.

We've sent it to the Senate.

We have done our job.

LAURA BARRON-LOPEZ: In his first major test is speaker, Kevin McCarthy secures a notable win, successfully but narrowly passing his debt limit and spending cuts package.

SEN. CHUCK SCHUMER (D-NY): Dead on arrival.

LAURA BARRON-LOPEZ: But Democrats reject the bill.

And the path forward in the high-stakes stalemate over the nation's debt ceiling is unclear.

Plus -- JOE BIDEN, U.S. President: But there's more to do.

So, let's finish the job.

LAURA BARRON-LOPEZ: -- President Biden makes it official, announcing his 2024 re-election bid.

DONALD TRUMP, Former U.S. President: We're going to beat him in the ballot box and we are going to settle our unfinished business.

LAURA BARRON-LOPEZ: And former President Trump, the current frontrunner for the Republican nomination, goes on the attack, next.

Good evening and welcome to WASHINGTON WEEK.

I'm Laura Barron-Lopez.

President Joe Biden and House Speaker Kevin McCarthy are locked in a high-stakes standoff over raising the nation's debt with weeks to go before the federal government is unable to pay its bills.

The two men have challenged each other for months as the deadline draws near with the president calling for a clean increase to the debt limit and a separate GOP budget plan, while Speaker McCarthy has called on President Biden to negotiate now over spending cuts.

And on Wednesday, McCarthy notched a symbolic win when his debt ceiling and spending cuts bill passed in the House, albeit along party lines and by two votes.

A buoyant McCarthy spoke to reporters after the vote.

KEVIN MCCARTHY: We lifted the debt limit.

The Democrats need to do their job.

The president can no longer ignore by not negotiating.

LAURA BARRON-LOPEZ: Republicans hope the bill's passing will increase pressure on the president to meet with the speaker, but Senate Democrats made clear that Speaker McCarthy's bill is, quote, dead on arrival in the upper chamber.

And when asked by reporters if he would negotiate with McCarthy over the debt limit, President Biden did not budge.

JOE BIDEN: I'm happy to meet with McCarthy but not on whether or not the debt limit gets extended.

That is not negotiable.

LAURA BARRON-LOPEZ: Joining us to discuss this and more, Dan Balz, the chief correspondent at The Washington Post, John Bresnahan, a co-founder of Punchbowl News, Mario Parker, the White House and Politics Editor for Bloomberg News, and Melanie Zanona, Capitol Hill Reporter for CNN.

Thank you for being here.

I think it is important first to establish first the stakes for this conversation.

If the country defaults on its debt, here is what would happen, we would quickly lose about one million jobs, there's a possibility of a recession, the credit rating for the country tanks, which would be followed by increasing interest rates, likely cuts to Medicare and social security benefits and military paychecks delayed.

That's not everything that would happen.

That's a number of the possible catastrophic things that would.

John, Republicans made clear with this bill that they are not going to agree to a clean debt limit increase.

They want spending cuts.

But this bill does not specify the spending cuts that they really want.

Is this a serious proposal to balance the budget?

JOHN BRESNAHAN, Co-Founder, Punchbowl News: It is and it isn't.

It is both at the same time because they are calling for pretty dramatic spending cuts.

They want to bring back, they want to return spending to the F.Y.

2022 level, two years ago, it's $130 billion less than we're spending now, than the government is spending now.

So, it is a pretty dramatic cut.

And they don't want to cut the Pentagon, and they don't want to cut veteran spending, they say.

So, they are going to cut everything else that is called non-defense discretionary.

This is the interior department, the commerce department, the labor department.

They're going make pretty -- to get to where they want, they are going to have to have huge cuts to those agencies.

It's never going to happen.

This is what they are calling for.

This is what their opening position is in this debate, and they want to force Biden to kind of talk on their ground where they are talking about spending cuts, caps, cuts.

They don't want to talk about spending more money or raising taxes.

They want to talk about cutting spending in as dramatic a way as they can.

LAURA BARRON-LOPEZ: And if they actually even achieve it, there are economists who say that those cuts themselves could potentially send the country into a recession.

But, Mario, I want to ask you about the White House, because right now, they aren't changing their tune.

The president is not changing his tune.

So, what are you hearing about how they are going to respond to this GOP bill?

MARIO PARKER, White House and Politics Editor, Bloomberg News: Yes.

Well, the pressure is starting to build on the White House, right?

They thought that they had the upper hand, particularly through the lens of what we saw in January, the number of votes that it needed, the number of times they had to vote in order for Speaker McCarthy to get the gavel.

Well, the gambit is starting to backfire slightly on the White House.

You are seeing the U.S. Chamber of Commerce come out and urged Biden to meet with McCarthy.

You are seeing a little bit of lackluster responses from folks like Josh Gottheimer.

You are seeing the business roundtable apply pressure also.

And don't forget, President Biden's talking point prior to the passage of the bill in the House had been, well, show me something, they don't have anything.

Well, now, they do.

And so now, the onus is on the president to at least start to be open to speaking with McCarthy, lest he get viewed as the one who is being an extremist in this situation.

LAURA BARRON-LOPEZ: Melanie, say that the top congressional leaders, McCarthy included, reach a deal with President Biden, it's going to be nothing like what was just passed, to John's point.

So, can Kevin McCarthy get all of his Republicans to support a deal with Democrats?

MELANIE ZANONA, Capitol Hill Reporter, CNN: That is the big question, and he's going to have to get those Republicans on board.

He might not need their votes if he cuts a Democratic deal, because you can pass something if you have Democratic votes in the House, but he needs them for his speakership.

Because they have made clear, the right flank, that they do not want anything watered down in their opinions of what they already past.

They have this tool known as the motion vacate, which the ability to essentially force a vote to oust the sitting speaker, they are threatening to use that if they don't get what they want.

So, that is hanging over McCarthy's head.

And that is why it's going to be challenge to -- I can't even imagine what this deal would like, to be honest, that something that all the Democrats can support and all the Republicans can support and that they could actually pass.

So, they are starting to think about what that would look like, like what can Kevin McCarthy get, because, right now, it's hard enough to get even this conservative wish list past through the House.

LAURA BARRON-LOPEZ: I mean, do we even known -- based on what you know about McCarthy's leadership style, do you think he is interested in a deal with Democrats, one that could bring conservatives along?

MELANIE ZANONA: Yes, I actually do.

I think he absolutely wants to get this done.

He does not want to default on his hands, either.

He recognizes the stakes as well.

And even though they're starting to feel confident that wouldn't get the blame, no one really knows how it is going to shake out.

I do think they want a solution, but he's very cognizant of these different competing dynamics that he has to deal with.

LAURA BARRON-LOPEZ: And, Dan, you have said you think that passage of this GOP bill could actually escalate the possibility that we hit the brink, that we could potentially get closer to the fiscal cliff.

Why do you think that is?

DAN BALZ, Chief Correspondent, The Washington Post: Well, I think the two sides are still so far apart and they are both done in on their respective positions.

And I think that we are going to get closer and closer to the brink before there is some movement toward a negotiation.

I think, inevitably, President Biden will get drawn into this.

I don't quite know when and how it will happen.

I have no idea what the deal would be that would put it together.

We have to remember, in 2011, we went through a similar process with a president who was starting his re-election campaign, Barack Obama.

And in that case, the vice president, Joe Biden, did a lot of negotiating on both raising the debt ceiling and cutting spending.

He was there at the beginning of those negotiations and when they blew up and they had to cut a very messy deal in the end, he was there to help bring that together.

So, he has been through this.

And there is something at stake for him in this that I think relates to his 2024 re-election campaign, which is this is an early moment of definition for him and the Republican Party.

And if he plays this smartly and well, he comes out perhaps stronger.

But if this thing blows up and the economy tanks, that is going to hurt him as well as the Republicans.

So, I think it behooves him to think about whether there is a way to get into negotiations that can produce a deal, but this is a more challenging Republican Party to negotiate with than even that tea party of 2011, as John well knows.

LAURA BARRON-LOPEZ: So, you think that there is risk, though, for both Republicans as well as President Biden?

DAN BALZ: Absolutely, yes.

LAURA BARRON-LOPEZ: Bres, you -- Punchbowl talked to Senate Majority Leader Chuck Schumer about what passed through the House by Kevin McCarthy.

And he thinks that this bill could potentially be heading the country towards a default as well.

So, is he standing by President Biden?

Is he standing by the position that the White House holds that you don't negotiate with Republicans on this?

JOHN BRESNAHAN: Oh, absolutely.

I think the Hill Democrats are even harsher on this than the White House is.

I mean, I have talked to folks in the west wing, and they are like maybe we can get to the table if McCarthy passes this bill when they were trying to put it together, and now, they were talking about -- you know, they are under pressure from Jeffries and Schumer, House Minority Leader Hakeem Jeffries and Schumer, not at this moment to negotiate.

I do think it is fascinating, though, Democrats - - and we were talking about -- Mel and I were talking about this before.

In the last day, I have gotten two Senate Democrats to call me and be like, what does McCarthy really want, like they are not talking to each other.

They are really -- I mean, we're four months into this Congress and they are still kind of just -- LAURA BARRON-LOPEZ: The Senate Democrats aren't talking to McCarthy?

JOHN BRESNAHAN: And McCarthy is not talking to them.

I mean, they're not talking to each other.

And it's amazing to me that there is so little discussion and we could be hitting this default day, the X date, they call it, in a couple weeks.

It could be June, it could be July.

We don't actually know yet.

But it is fascinating that they don't have a read on him at all, really, what does he have to have to make a deal.

And I think that is a huge problem.

And then beyond that, they have no idea what is happening in the House Republican conference.

They really don't.

A lot of these members are new.

They have not dealt with him before.

Biden does not know them, The White House doesn't them.

Schumer does not know them.

So, I mean, it's a real -- I mean, we could blunder our way into a worse situation than 2011 very easily.

I mean, they could just keep talking past each other and we could find ourselves on the verge of a default.

LAURA BARRON-LOPEZ: But as Mario said, the White House is facing some more pressure potentially from this bill to come to the table.

I mean, do you -- are you hearing any additional pressure coming from Democrats now towards the White House to negotiate?

JOHN BRESNAHAN: I mean, there are some moderate Democrats interested.

MELANIE ZANONA: Just like rank and file Democrats.

JOHN BRESNAHAN: Yes, you're talking about Gottheimer.

Joe Manchin has been very vocal about this.

I do think they will - - you know, the House is out for a week.

I think they will go back home.

I think they'll start to hear more from folks on Main Street.

This is starting to percolate a little bit into Main Street.

It had not really yet.

I think Wall Street has started to really pay attention to this.

I mean, you are seeing insurance on a possible default going up, the cost of that going up.

So, I think people are starting to pay attention to it because, really, they -- I mean, we are four months into this Congress and there has been very little movement until this week, until this vote.

So, finally, there is something, but both sides are still kind of just staring at each other.

MARIO PARKER: And to John's point, yes, this is starting to emanate outside of Washington, right?

We were all kind of watching the politics of it.

But when you start talking about things like delayed social security payments, Medicaid, Medicare beneficiaries, higher interest rates just on your mortgage or your car loans, those are the type of things that get constituents calling their representatives, and you don't want those calls if you are a representative.

DAN BALZ: And the economy is in a fragile spot, right?

And it is not as though this is a robust economy that could take a bit of a shock.

There's so much nervousness that what we saw with the banking industry.

Jobs market looks strong still, but in all other ways, if we got the kind of jolt that we are talking about or even come close, it's going to set off some real concerns.

LAURA BARRON-LOPEZ: And do you think that - - you mentioned 2011 and us reaching the fiscal cliff there.

Do you think this is a 2011-level scenario?

DAN BALZ: I think it could be worse in part what you have been talking about, which is there is no communication, there is no understanding.

I mean, the only thing I can think of, and you all might have a better sense of this than I do, is that the relationship between the president and Mitch McConnell may be a back-doorway into something.

But I think we are a ways away from that.

I think there's a lot of brinkmanship yet to happen.

LAURA BARRON-LOPEZ: And, Melanie, you mentioned the possibility of Democrats providing votes in the House to get past this.

Do you have any sense of if Minority Leader Hakeem Jeffries is actually going to want to do this, to give votes?

MELANIE ZANONA: As of today, they are holding their position that there are going to be no negotiations and just a clean debt ceiling hike.

But I think the closer we get to that X date, and we should be getting more information next week about what that X date, I think the closer we get to that, we might start to see some movement there.

LAURA BARRON-LOPEZ: And I just want to ask again, I mean, the stakes of this, John, is there any sense that lawmakers really are feeling it, are feeling how close we could come to the brink?

JOHN BRESNAHAN: I know Mel and I talk to these guys all the time.

There's a large part of the House Republican conference that does not believe a default is a real crisis, that we can pay our interest on the debt, we can make enough payments to keep -- the default is not real, that's a phony funny thing, and I think this is extraordinarily dangerous.

And like you said, 2011, in 2011, John Boehner was the speaker, and he at least had a relationship with Biden.

He knew not so much President Obama at that point, but he knew Biden and there was McConnell and the debt was a lot smaller than what we are talking about.

But I can remember sitting outside in office in 2011 and Boehner came out and he had been talking to the tea party guys, and he is like, I can't talk to these guys.

He's telling the reporters this.

I think it is worse now.

I mean, McCarthy barely survived by the skin of his teeth, and at that point, Boehner was still viable.

I mean, McCarthy barely got there.

So, I do think he wants to govern appropriately, but I do -- can he survive this?

I'm not entirely sure.

LAURA BARRON-LOPEZ: Can his speakership survive this, right, yes.

Well, for all the reasons we outlined, we hope that we don't go over the fiscal cliff.

But we want to turn to 2024 now.

President Biden officially announced this week he is running for a second term, setting the stage for a possible 2024 rematch against his predecessor, Donald Trump.

JOE BIDEN: The question we are facing is whether in the years ahead, we have more freedom or less freedom, more rights or fewer.

LAURA BARRON-LOPEZ: Trump, the current frontrunner for the GOP's presidential nomination, responded in his own video.

DONALD TRUMP: When I stand on that debate stage and compare our records, it will be radical Democrats' worst nightmare.

LAURA BARRON-LOPEZ: President Trump, Mario, went on to also say in that video again that the election was rigged, that it was stolen.

Those lies, plus the efforts by Republicans in a number of states to restrict abortion, LGBTQ rights, to ban books, is a big part of why President Biden focused his re-election launch on freedom -- what they describe as freedom.

Is this a new message from the president?

MARIO PARKER: It's just a continuation.

I think when we hear the president say, finish the job, he means the job that he outlined in 2020 when he said that he was galvanized by what happened in Charlottesville, right?

So, if you look at the -- if you read the tea leaves from his first presidential -- his 2024 ad, we don't see the traditional hardhats and construction workers or American flag until almost two minutes into that video.

What we see is January 6.

We hear 30 seconds in him invoke MAGA, and him linking that to voting rights, to abortion rights, all of those different things as well.

And so he is almost downright giddy at the prospect of having a rematch with former President Donald Trump.

LAURA BARRON-LOPEZ: Dan, in addition to the presidents launch video, the Democratic National Committee as well as some other Democratic super PACs are heavily focused on abortion and guns.

But what stands out to you about the way the president is shaping the argument for his second term?

DAN BALZ: I agree with Mario.

I was struck by the fact that the parallelism between the opening of the 2020 video, which was Charlottesville and the opening of the 2024, which is January 6th, and then a very fast pivot to the abortion issue in particular, which said to me he is running a combination of what he did in 2020, which was a focus on President Trump and the threats that Trump has done to the country and the threats to democracy in particular, and amping that up because of January 6th and the election denialism that the former president has continued to talk about.

And at the same time, a version of what he and the Democrats did in 2022, which was to focus on abortion and guns, but particularly abortion as a motivating force to bring Democrats out.

He wants this, as do all presidents running for re-election not be a referendum on him.

He wants it to be a choice.

And in Donald Trump, he has the ideal foil to be able to make it a choice and not a referendum.

LAURA BARRON-LOPEZ: And, John, Donald Trump is still the front runner in this race in the GOP primary, despite the fact that these investigations are looming in particular, his former vice president, Mike Pence, just testified on Thursday for hours before a federal grand jury about the president's potential efforts to overturn the 2020 election.

The district attorney in Fulton County, in Georgia, says that she will decide whether or not to charge the former president in their investigation in the election results in Georgia.

Are any of his challengers seizing on this?

JOHN BRESNAHAN: I mean, they -- look, right now -- and he has been indicted in New York on 34 felony counts.

So, I mean, I do think they are not directly seizing on it, but I do -- they are clearly intimating that he's got problems and that he's got more baggage than any president in history and is running again.

And I do think, and I think that they are kind of echoing a little bit what you see Biden is saying.

The message of Trump is, in a lot of ways, he will go back -- he only remembers the first three years of his presidency.

He does not remember the last year.

He never talks about that.

The pandemic does not exist in his mind, okay?

And in the Biden message subtly, to me, is chaos, that Trump was chaos.

And I think we see that with some of these ads.

I think DeSantis is presenting in particular the image of competency.

I got through the chaos in a competent way.

I managed Florida in a competent way.

And Tim Scott has this upbeat approach and Asa Hutchinson and Nikki Haley have different approaches.

I do think they are trying to come at it indirectly.

I don't think they can say really -- I don't think you will see DeSantis at this point or anybody say, look, you know, he could be in prison.

I don't think he is going to say that.

But, look, it is his problem, let him clean it up.

LAURA BARRON-LOPEZ: Yes.

Ron DeSantis so far has not been forcefully going after him on January 6th.

But speaking of DeSantis, he -- and abortion, which we've been talking about, he signed a six-week abortion ban in Florida.

Melanie, you have covered GOP efforts to restrict abortion.

Do Republicans in Congress think that abortion is political quicksand now?

MELANIE ZANONA: Absolutely, yes.

Literally, when I was trying to ask Republicans their reaction to the abortion pill ruling, they were running away from me.

They've been running across the street into traffic to avoid my question.

And the last time they had the majority, they -- in years like 2017, 2015, they passed a federal abortion ban, a 20-week federal abortion ban.

And me and my colleagues did some digging and they have no intentions of putting an abortion ban on the floor partly because they don't have the votes.

They only have a four-seat margin.

They have moderates.

But it's also because they recognize that this was such a liability for them in the midterms, and they would much rather just stick their heads in the sand and try to ignore it.

But the problem is when you let the states be in the driver seat, you are going to have states like Florida that are signing six-week bans.

You are going to have these Supreme Court rulings that are out of their hands, and they are going to be forced to answer for the results of those.

And so there is debate internally in the GOP right now, do we continue to ignore this or can we address it, can we lean into this somehow in a way that can politically benefit us, but they just have not decided in what that message would be.

LAURA BARRON-LOPEZ: And, Dan, sticking with DeSantis, he appears to be jumping in relatively soon to the race, but he is facing a lawsuit from Disney for using his state power essentially to go after a company for disagreeing with him on the don't say gay bill.

It is not just Democrats criticizing DeSantis, though, is it?

DAN BALZ: No, not at all.

And this Disney battle has turned into quite an ordeal for him.

I mean, he fired the first shots in this a year ago when Disney took issue with the don't say gay bill, and I think he thought he had the upper hand, and he was handsomely rewarded with a big re-election victory, and I think he came out of that thinking that he was doing the right thing and that people were rewarding him for it.

But Disney is playing a long game and they have been in Florida a long time and they will be in Florida long after Ron DeSantis is governor.

And this has become a problem for him rather than a pure asset.

He has got to deal with this.

And I think there are Republicans and others who see this as a misuse of kind of conservative values and strategies.

The idea that you are using government to go after the private sector kind of turns historic conservatism on its head.

And he is beginning to have some of that backlash.

So, he is potentially losing a war with Disney over the particulars, and he's getting criticism from other conservatives about the strategy.

So, this is one more piece of evidence that he is kind of -- he's finding his footing and sometimes not finding it very successfully as he makes the transition from being a successful statewide candidate to the national stage.

LAURA BARRON-LOPEZ: Yes, like you said, turning conservatism on its head and using government in a very different form than it has been used previously.

But I think that we got to leave it there.

I know we can continue going on about the 2024 field and how it is taking shape.

So, thanks to all of our panelists for joining us and for sharing your reporting.

And thanks to all of you for watching at home.

Be sure to tune into "PBS NEWS WEEKEND" Saturday for a look at the teacher shortage in rural America and efforts to overcome it in Montana.

I'm Laura Barron-Lopez.

Good night from Washington.