Alarm bells will be continuously ringing in the coming weeks about America’s debt ceiling, with President Biden not moving an inch toward House Republicans and Speaker McCarthy working slowly to develop his budget proposal. 

The two men have traded letters in recent days highlighting their firm stances.

Mr. McCarthy hopes to tie the debt limit negotiations to a broader discussion about the budget, but the president has so far refused to do so. “With each passing day, I am incredibly concerned that you are putting an already fragile economy in jeopardy by insisting upon your extreme position of negotiating any meaningful changes to out-of-control government spending,” the speaker wrote to the president. 

He laid out several policy areas where he said he thinks he can work with Mr. Biden: returning non-defense spending to pre-pandemic levels, reclaiming unspent Covid-19 emergency funds, placing work requirements on certain entitlement programs, promoting energy development, and securing the border. 

With just a four-seat majority, Mr. McCarthy must listen intently to the desires of those farthest to his right — the members of the House Freedom Caucus. The speaker’s letter is a near carbon copy of the debt limit proposals offered by the group three weeks ago. 

In a letter, the conservative firebrands in the Freedom Caucus called for fewer regulations on the energy sector, ending the student loan cancellation policy, capping spending at pre-pandemic levels, and reinstating work requirements for welfare recipients. 

One solution offered by Republicans is to “prioritize” payments after the debt ceiling has been breached. Under such a rule, the government would still pay Medicare, Social Security, and veterans benefits even as debt payments are suspended. 

Secretary Yellen threw cold water on that proposal, though, telling the House Ways and Means Committee in early March that the plan is just “default by another name.”

“We should not think that prioritization is a solution to the debt ceiling issue,” she told the committee. “Prioritization is simply not paying all of the government’s bills when they come due.”

Mr. Biden responded the same day Mr. McCarthy released his letter publicly. “We can agree that an unprecedented default would inflict needless economic pain on hard-working Americans and that the American people have no interest in brinkmanship,” his letter to the speaker said. “That is why House Democrats joined with House Republicans and voted to avoid default throughout the Trump Administration — without conditions, despite disagreements about budget priorities. That same standard should apply today.”

Mr. McCarthy’s speakership hangs in the balance during these negotiations. In his fight to win the speaker’s gavel in January, he made a number of concessions to the Freedom Caucus and its ideological allies, including allowing for a rule change that permits any individual member to come to the floor and call for a vote of no confidence in the speaker. 

Should these debt ceiling negotiations leave conservatives dissatisfied, Mr. McCarthy could face another days-long fight for the House’s top job. 

While Mr. McCarthy is shoring up his right flank, some Democrats say Mr. Biden’s no-compromise position is out of the same playbook he used as a negotiator during debt ceiling talks in 2011. The Tea Party movement had just elected a not-insignificant number of representatives, and the new crop of legislators refused to raise the ceiling without a significant package of tax and spending cuts.

That standoff was the closest the United States has ever come to defaulting on its debts. At the time, Standard & Poor’s downgraded the country’s credit rating for the first time in history, to AA+ from AAA. In the weeks surrounding the negotiations, the S&P 500 index fell by more than 15 percent and 10-year Treasury yields dropped by more than a third. 

Speaker Boehner and President Obama worked long hours to find a compromise, only to have Tea Party-aligned representatives reject many of the White House’s concessions as not going far enough. Talks between Messrs. Obama and Boehner eventually fell apart, forcing Vice President Biden to work alongside former Senate colleagues on a bipartisan deal that passed just 48 hours before the deadline. 

Messrs. Biden and McCarthy met for their first debt ceiling negotiation on February 1 and have not had a meeting since. According to an estimate from the Department of the Treasury, the debt ceiling will be breached in early June.