The White House and congressional Republicans are at odds over multiple issues, but the question of where to set spending levels for the fiscal year that begins in October has emerged as a major sticking point. McCarthy has pushed for an agreement that would trim $100 billion from agency budgets in exchange for Republican support for lifting the debt ceiling. Democrats argue that such steep reductions would harm the economy and slash a range of critical services for families and businesses.

Each side has accused the other of intransigence with time running short. President Biden has cut short an overseas trip and plans to return to Washington on Sunday.

The debt ceiling is the legal limit on government borrowing — currently set at $31.4 trillion. Since the national debt hit that level in January, Treasury Secretary Janet L. Yellen has been taking extraordinary measures to balance the nation’s books. But she has warned that time is running out on those tactics, and that the Treasury Department could run short of cash as soon as June 1 unless Congress acts to raise the debt ceiling.

On Friday, Goldman Sachs issued a note projecting that Treasury reserves should be sufficient to make payments through June 8 or 9, when the risk of running out of cash would become severe. Failure to make critical payments — whether military paychecks, Social Security benefits or interest on previously issued debt — could tip the nation into an unprecedented default.

Government officials from both parties agree that such a scenario could be devastating, potentially sparking a global financial crisis and plunging the United States into recession. The deadline and fear of fallout has led lawmakers to seek a compromise, but the leading negotiators — Biden and McCarthy — have come under immense pressure from their respective parties in recent days not to give too much to the other side.

McCarthy has said he needed an agreement in principle by this weekend for the House to ensure the debt ceiling is not breached — a target that is now all but sure to be missed.

Some on Capitol Hill interpreted Friday’s pause in talks as a potential negotiating ploy aimed at assuring both sides that their leaders are fighting aggressively for their priorities.

Biden has faced mounting criticism from some Democrats over his decision to entertain new work requirements in certain federal benefit programs for the poor. On Friday, 66 liberal Democrats sent a letter urging Biden to invoke the 14th Amendment and essentially declare the debt limit unconstitutional — a move that would allow Treasury theoretically to continue to borrow and allow the White House to avoid caving to Republicans demands. Meanwhile, McCarthy has faced fresh attacks from the conservative House Freedom Caucus over signs that the deal would not sufficiently cut spending.

Before Friday’s pause, lawmakers had appeared to be making progress on the contours of the agreement. In addition to temporarily raising the debt limit, talks have focused on clawing back some unused money meant for coronavirus relief programs, reforming the permitting process for energy projects and creating new work requirements for certain federal programs. But negotiators have had little luck resolving what has long appeared to be the most intractable issue: how much money the government should spend during the budget year that begins in October and whether increases in spending should be capped in subsequent years. Republicans have sought trillions of dollars in cuts to a huge portion of the federal budget, and Democrats have resisted those changes.

White House officials and congressional negotiators face an extreme time crunch if they want to cut a deal before June 1, when $10 billion in military salaries and retirement funds are scheduled to be issued, followed by $25 billion in Social Security benefit payments on June 2. It’s unclear what would happen to those payments if the government doesn’t have enough cash on hand.