WASHINGTON — A meeting between President Joe Biden and House Speaker Kevin McCarthy on Monday afternoon to discuss a path forward to avert a debt limit breach failed to yield a deal, but both sides agreed that talks were "productive."

"We don’t have an agreement yet, but I did feel the discussion was productive in areas that we have differences of opinion,” McCarthy, R-Calif., told reporters after leaving the Oval Office. He added that the “tone tonight was better than any other night we’ve had discussions.”

A White House official said disagreements remain, but echoed the speaker’s assessment that the meeting was overall “productive,” a word that continued to surface as negotiators fanned out.

It was a “solid” and “respectful” conversation, the official said.

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Biden, who did not make public remarks, repeated in a statement the assessment that talks were “productive,” adding that talks between staff negotiators would continue.

With only days left until the June 1 deadline when the Treasury Department may be unable to pay the nation’s bills, urgency is mounting for Biden and McCarthy to find a path to raising the government’s borrowing limit.

McCarthy repeatedly stopped short of assuring that the two sides would reach a deal in time, saying he wished they had started negotiating before the final hour. He ruled out cuts to military spending as well as new revenues to reduce the deficit, which — along with his promise not to cut Social Security and Medicare — leaves a limited slice of the U.S. domestic budget on the chopping block. McCarthy also said he doesn't support a short-term extension of the debt limit deadline, to buy the two sides time, and promised to honor the 72-hour rule to give members time to read an agreement before voting on a bill.

Biden said before the meeting he was “optimistic” about progress and told reporters in the Oval Office that default was not an option. 

“The American people would have a real kick in their economic wellbeing,” Biden said. “As a matter of fact, the rest of the world would too.”

Asked whether an agreement on overall spending could break the logjam, Biden said “that alone” would not suffice. The president said he also wanted to close tax “loopholes and making sure the wealthy pay their fair share."

The two sides agreed that reducing the deficit is a priority, he said, but are at odds over spending cuts and measures to raise revenue.

“While there are areas of disagreement, the Speaker and I, and his lead negotiators Chairman McHenry and Congressman Graves, and our staffs will continue to discuss the path forward,” Biden said in the statement.

“We do have disagreements,” said McCarthy, adding that revenue had grown. But the speaker said he and Biden “both agree that we need to change the trajectory, that our debt is too large.”

Earlier, McCarthy has said he’s insisting on an agreement to “spend less” than current levels in a deal, although he was mum when asked if the total amount would be somewhere in between this year and fiscal 2022 levels. McCarthy drew a line against cuts to military spending prior to meeting with Biden: “I don’t think you should put America in jeopardy. To me, it is off the table.”

The White House is eyeing health savings as one area for compromise with Republicans as the two sides seek to bridge a policy gap trillions of dollars wide, according to a source familiar with the talks. The savings would target areas of federal programs, like Medicare Part B, where the government is seen as overpaying private healthcare companies, this source said.

Most importantly, the source said, such “savings” would be considered “revenue” for Democrats in these negotiations — allowing both sides a win.

A major outstanding question is whether Biden and McCarthy can reach a deal that has the votes to pass the Republican-led House and Democratic-controlled Senate in a short period of time. And if a bill is passed with mostly Democratic votes in the House, will McCarthy face an uprising from his hard-line members. A push for sharper budget cuts has become a source of tension inside the Republican caucus, as some conservatives fear McCarthy may be willing to strike a deal with Biden that doesn’t go far enough. 

A White House official said before the sit down that a “reasonable compromise” was still attainable, despite the obstacles in reaching a deal both sides can agree to. The hope is that Biden and McCarthy can come to an agreement on spending, the official said. 

McCarthy had said he hoped they would find “common ground” on a deal that would lift the ceiling while working to curb inflation, reduce dependence on China and make the congressional spending process "work.”

The speaker has said that “decisions have to be made” in time to avoid a crisis, and that he understands Republicans “don’t control the Senate and we don’t control the presidency.”

McCarthy will have to navigate the demands of conservative hard-liners in his narrow majority, who are pressing for stricter spending cuts and say that the House-passed bill, called the Limit, Save, Grow Act, should be the standard to which they hold any deal.

Biden is facing angst from his party’s left flank over his entertaining some GOP demands, such as stricter work requirements for federal aid programs. Many progressives, uneasy with the negotiations, have called on the president to invoke the 14th Amendment and tackle the debt ceiling unilaterally.

“I’m looking at the 14th Amendment as to whether or not we have the authority. I think we have the authority,” Biden said Sunday at a news conference in Hiroshima. “The question is: Could it be done and invoked in time that it could not, would not be appealed, and as a consequence, pass the date in question, and still default on the debt? That’s a question that I think is unresolved.”

The meeting followed a frantic few days of staff-level negotiations between the White House and Republican leaders.

Senate Majority Leader Chuck Schumer, D-N.Y., adjourned the chamber last week for a pre-scheduled recess but told senators to be ready to return within 24 hours’ notice.

Negotiations had hit turbulence in recent days over the core dispute of how much the federal government should spend in the next fiscal year. McCarthy and Republicans want a substantial cut that Democrats have been reluctant to grant. Democrats calculate that Republicans are proposing discretionary spending cuts of 22% if military programs are exempted, as many in the GOP want.

Speaking in Hiroshima, Japan, Sunday, Biden argued that Republicans’ “extreme positions” were holding up progress.

“I’ve done my part,” Biden told reporters. “Now it’s time for the other side to move. There are more extreme positions, because much of what they’ve already proposed is simply, quite frankly, unacceptable.”

On Biden’s way back Sunday from the G-7 summit in Japan, he had a phone call with McCarthy that the speaker described as “very productive” and included a request from the president to meet.

Arriving at the Capitol on Monday morning, Rep. Patrick McHenry, R-N.C., a McCarthy ally, told reporters that the call “got us back in the room together."

Biden over the weekend had appeared less certain that Republicans would do whatever was needed to avert default, warning that “he can’t guarantee” Republicans won’t force a situation where the government is unable to pay its bills.

But the president on Monday said he and McCarthy had discussed “the need for bipartisan agreement" that could pass both chambers.