Now, I want to turn briefly to the debt ceiling talks. However the mainstream press plays it, or the White House for that matter, the fact is that Speaker McCarthy has knocked President Biden off his clean debt ceiling perch, and has already achieved a major victory in the battle of the budget. Why?  

Because Mr. Biden not only had a meeting in the White House with congressional leaders, but he also finally met with Mr. McCarthy after 97 days accumulated since their first meeting. That by itself was a Biden surrender.  

The second point is that, despite Mr. Biden’s blarney that he’ll never negotiate budget reforms as part of the debt ceiling discussion, he has now agreed to send White House staff to meet with congressional staff to — hang on a minute, get ready for it — discuss budget savings as part of a debt ceiling increase plan. They’re all going to meet again with the president on Friday for a follow-up.  

So, Mr. Biden is now doing exactly what Mr. McCarthy asked him to do back in February. In fact, sources confirm that congressional staff met with the White House representatives today in Mr. McCarthy’s office at the Capitol. So, they’re getting down to work. There isn’t going to be a debt default. There never was going to be a debt default.  

Mr. Biden just kept trumpeting that as well as the idea that somehow he could ignore the new House Republican majority or its talented leader, Kevin McCarthy. Mr. Biden failed, and that’s the significance of yesterday’s White House meeting.  

I don’t care how the White House spins it: This was a big win for Mr. McCarthy. 

Now, the negotiations are going to go on for a while. They will be very difficult, undoubtedly contentious, and will go right up to the final D-Day date. But, the exact D-Day date, when the government supposedly runs out of money, is really a known unknown.  

Secretary Yellen says June 1, and I suppose she could be right. But the Treasury could keep looting from various government retirement funds forever. So, the D-Day date is a moving target. That will add to the drama.  

So far, the Treasury bond market is showing no fear of a Treasury D-Day. I don’t know if Mr. Biden realized it, but yesterday, during his rare presser, he actually capitulated to one of Mr. McCarthy’s demands — to claw back unused Covid relief money. So, that’s a complete surrender to reducing the budget.  

White House people have been whispering to their favorite press outlets that the Republicans can’t touch any of our unpaid bills. Well, a Covid clawback is not an unpaid bill, and, by the way, canceling the student loan cancellation is not an unpaid bill either.  

Another point is the Republican demand to include H.R. 1, the Lower Energy Costs Act, which would reopen the oil and gas spigots with thorough permitting reform, a very popular measure in both houses with Democratic support.  

So, we’ll see how this plays out in the weeks ahead. There will be plenty of battles over fiscal year baselines and the 1 percent growth limit for future spending.  

Mr. Biden is already out on the campaign trail trying to scare everybody about health care and veterans’ aid. We used to call that a “Washington Monuments Syndrome” — that any spending cuts will destroy all the wonderful things on Planet Earth.  

Really, though, the Republicans are not cutting the budget — they’re putting a speed limit on the discretionary portion of the budget, and for good reason: because of Mr. Biden’s $6 trillion spending explosion in the last two years.  

Somebody has to slow it down, and that’s what the Republicans are arguing.  

Meanwhile, the GOP appropriators haven’t made any decisions yet, so all of Mr. Biden’s blarney should be ignored.  

He just got whipped by Mr. McCarthy. His approval rating is down to 36 percent. His economy in the first quarter was a recession-prone 1.1 percent. Polls show Democrats don’t want him to run for re-election.  

So, Mr. Biden’s giving in, dropping his promise for a clean debt ceiling bill. Hats off to Mr. McCarthy for at least some progress.  

Save America. Pass Mr. McCarthy’s bill.  

From Mr. Kudlow’s broadcast on Fox Business News.