Negotiations between the administration of Democratic U.S. President Joe Biden and lawmakers in the Republican-controlled House of Representatives over the government’s debt limit will resume Wednesday.

Talks between the two sides broke off Tuesday without any apparent progress towards an agreement that would give the U.S. Treasury permission to exceed the current $31 trillion ceiling and continue borrowing money to pay the government’s outstanding debt. Treasury Secretary Janet Yellen has warned that the department will run out of money by Thursday, June 1, which could force the government to default on its debts, plunging the U.S. into a catastrophic recession and creating turmoil on global markets.

House Republicans are demanding the Biden administration agree to reduce federal spending back to 2022 levels. Republicans also want to impose strict work requirements for Americans enrolled in such low-income relief programs as food and cash assistance and the Medicaid health insurance program.

The White House has proposed freezing federal spending at this year’s current levels, and wants to end tax breaks for wealthier Americans and some corporations. The administration has also proposed that defense spending be included in any potential spending cuts.

Both President Biden and House Speaker Kevin McCarthy have rejected the competing proposals, but news outlets say a potential deal could include taking back up to $30 billion in unspent COVID-19 pandemic relief funds and reforms to simplify the approval process of new energy projects.

White House spokeswoman Karine Jean-Pierre told reporters Tuesday that the negotiations were “moving forward,” but insisted that both Democrats and Republicans “have to understand that they’re not going to get everything they want.” She said the goal is “to get to a budget that is reasonable, that is bipartisan, that Democrats and Republicans in the House and the Senate will be able to vote on and agree on.”

But Representative Garret Graves, one of the House Republican negotiators, said Tuesday there were still “significant gaps” between the two parties.

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A group of hardline conservative Republicans are urging Speaker McCarthy – who needed their support to be elected to his post back in January – not to reach a compromise with Biden and instead force the president to give in to their demands. Biden is also being pressured by House Democrats not to give into Republicans and simply declare that the government will continue to borrow money by invoking the 14th Amendment to the U.S. Constitution, which states that the “validity of the public debt of the United States, authorized by law…shall not be questioned.”

The negotiations are also complicated by the need to convert the agreement into legislation and allow House lawmakers 72 hours to review the bill before bringing it to a vote. It then must go to the Democratic-controlled Senate for passage before it goes to Biden for his signature.

Some information for this report came from The Associated Press, Reuters and Agence France-Presse.