WASHINGTON: Debt ceiling negotiators for President Joe Biden and House Speaker Kevin McCarthy locked down for further talks on Capitol Hill on Tuesday, but Republicans warned of a “lack of urgency” at the White House to resolve the budget impasse in time to avoid a potentially chaotic federal default.
Barely a week before the June 1 deadline, the Democratic president and the Republican president were watching for a financial crisis. Failure to strike a deal would be unprecedented and would certainly throw U.S. financial markets into turmoil, inflicting economic hardship at home and abroad.
Behind closed doors, McCarthy has urged his slim Republican majority in the House to “stick together” despite their own factions as he brokers the strongest possible deal for the conservatives, lawmakers said on leaving the private session.
“We’re not there yet,” McCarthy said on Capitol Hill, reiterating that he won’t introduce any bills “that don’t spend less than what we’ve spent this year.”
Grassroots Republican lawmakers have been told they can continue with their scheduled recess week around Memorial Day away from Washington, which is scheduled to begin after Thursday’s session. But McCarthy warned them to be on call 24 hours a day to come back to vote on any deal.
Drifting into a second week, negotiations on raising the national debt ceiling, now to $31 trillion, were never meant to get to this stage – a crisis in the making.
The White House insisted early on that it was unwilling to negotiate the nation’s need to pay the bills, demanding that Congress simply raise the cap as it has done many times before without any condition.
But newly-elected President McCarthy, R-Calif., visited Biden in the Oval Office in February, urging the president to come to the negotiating table on a budget package that would cut spending and the government’s bloated post-COVID deficits. country in exchange for the vote to authorize future debts.
The pair said Monday night after a crucial meeting at the White House – after the chairman returned from the Group of Seven summit in Japan – that the talks were productive.
But with little time to strike a deal, they are scrambling to find a compromise that could be quickly approved by the Republican House and Democratic Senate and signed into law.
Negotiations are focused on finding agreement on a limit for the 2024 budget year. Republicans insist that government spending next year be lower than it is now, but the White House is instead proposing to freeze spending at current 2023 figures.
Agreement on that core spending level is essential — to allow McCarthy to limit conservative spending without being so harsh that he would drive out the Democratic votes that would be needed for the divided Congress to pass any bill.
The White House continues to argue that deficits can be reduced by ending tax breaks for the wealthiest households and some businesses, but McCarthy said he told the president at their February meeting that the increase income through tax increases was not an option.
Negotiators are also debating how long a 1% cap on annual spending growth will last going forward, with Republicans reducing their demand for a 10-year cap to six years, but the White House offering only one year, for 2025.
Typically, the debt ceiling has been lifted for the duration of a budget deal, and in this negotiation, the White House is aiming for a two-year deal that would push back presidential elections.
A top Republican negotiator, Rep. Patrick McHenry of North Carolina, who joined the speaker in the Oval Office Monday night, said there needed to be more urgency. The talks resumed Monday evening at the Capitol for two hours, and resumed Tuesday noon.
“What I sense from the White House is a lack of urgency,” McHenry told reporters.
But on the Senate side, Republican Leader Mitch McConnell said, “Listen, I think everyone needs to relax.” He said “the last 10 times we raised the debt ceiling, there were things attached to it” – as the White House objected to this year.
“It’s not that unusual.”
However, time is running out. The Speaker of the House promised lawmakers he would abide by the rule to publish any bill for 72 hours before voting, making any action questionable until the end of the week – just days before the potential deadline. The Senate is also expected to pass the package before it can travel to Biden’s office to be signed.
After a weekend of start-stop talks, Biden and McCarthy declared the need for a compromise deal. U.S. financial markets fell last week after trading paused amid a choppy economy.
McCarthy faces a far-right flank in his own party that is likely to reject any deal, leading some Democrats to encourage Biden to resist any compromise with Republicans and simply raise the debt ceiling on his own, an unprecedented and legally burdensome move.
On Tuesday, the leader of the conservative House Freedom Caucus representative, Scott Perry, said: “We all want to stick together. But again, it’s about sticking together around the right thing.
He and others are increasingly skeptical of the June 1 deadline which Treasury Secretary Janel Yellen says is when “it’s very likely” the government won’t be able to pay. all the nation’s bills.
Perry suggested the Treasury Department was going to be “full of cash” on June 15, when quarterly tax payments are due.
“There is absolutely no reason to do this and we all know that,” he said.
As negotiators focus on the more than $100 billion difference between the 2022 and 2023 spending plans as a locus of reduction, other priorities Republicans are pushing for under the deal remain on the table.
Republicans also want to tighten work requirements for government assistance to beneficiaries of the Medicaid health care program, though the Biden administration has countered that millions could lose coverage.
The GOP further wants further food aid cuts by limiting states’ ability to waive work requirements in places with high unemployment. But Democrats have said any changes to work requirements for government assistance recipients are not valid.
GOP lawmakers are also seeking to cut funding for the IRS and, by sparing the defense and veterans accounts from the cuts, would shift the bulk of the spending cuts to other federal programs.
The White House has responded by holding defense and nondefense spending steady next year, which would save $90 billion in fiscal year 2024 and $1 trillion in 10. years.
All parties are considering the possibility of the package including a framework to ease federal regulations and accelerate the development of energy projects. They are almost certain to recover some $30 billion in unspent COVID-19 funds now that the pandemic emergency is officially over.
The president, however, said he’s ruling out the possibility, for now, of invoking the 14th Amendment as a solution, saying it’s an “unresolved” legal issue that will be stuck in court. .
Barely a week before the June 1 deadline, the Democratic president and the Republican president were watching for a financial crisis. Failure to strike a deal would be unprecedented and would certainly throw U.S. financial markets into turmoil, inflicting economic hardship at home and abroad.
Behind closed doors, McCarthy has urged his slim Republican majority in the House to “stick together” despite their own factions as he brokers the strongest possible deal for the conservatives, lawmakers said on leaving the private session.
“We’re not there yet,” McCarthy said on Capitol Hill, reiterating that he won’t introduce any bills “that don’t spend less than what we’ve spent this year.”
Grassroots Republican lawmakers have been told they can continue with their scheduled recess week around Memorial Day away from Washington, which is scheduled to begin after Thursday’s session. But McCarthy warned them to be on call 24 hours a day to come back to vote on any deal.
Drifting into a second week, negotiations on raising the national debt ceiling, now to $31 trillion, were never meant to get to this stage – a crisis in the making.
The White House insisted early on that it was unwilling to negotiate the nation’s need to pay the bills, demanding that Congress simply raise the cap as it has done many times before without any condition.
But newly-elected President McCarthy, R-Calif., visited Biden in the Oval Office in February, urging the president to come to the negotiating table on a budget package that would cut spending and the government’s bloated post-COVID deficits. country in exchange for the vote to authorize future debts.
The pair said Monday night after a crucial meeting at the White House – after the chairman returned from the Group of Seven summit in Japan – that the talks were productive.
But with little time to strike a deal, they are scrambling to find a compromise that could be quickly approved by the Republican House and Democratic Senate and signed into law.
Negotiations are focused on finding agreement on a limit for the 2024 budget year. Republicans insist that government spending next year be lower than it is now, but the White House is instead proposing to freeze spending at current 2023 figures.
Agreement on that core spending level is essential — to allow McCarthy to limit conservative spending without being so harsh that he would drive out the Democratic votes that would be needed for the divided Congress to pass any bill.
The White House continues to argue that deficits can be reduced by ending tax breaks for the wealthiest households and some businesses, but McCarthy said he told the president at their February meeting that the increase income through tax increases was not an option.
Negotiators are also debating how long a 1% cap on annual spending growth will last going forward, with Republicans reducing their demand for a 10-year cap to six years, but the White House offering only one year, for 2025.
Typically, the debt ceiling has been lifted for the duration of a budget deal, and in this negotiation, the White House is aiming for a two-year deal that would push back presidential elections.
A top Republican negotiator, Rep. Patrick McHenry of North Carolina, who joined the speaker in the Oval Office Monday night, said there needed to be more urgency. The talks resumed Monday evening at the Capitol for two hours, and resumed Tuesday noon.
“What I sense from the White House is a lack of urgency,” McHenry told reporters.
But on the Senate side, Republican Leader Mitch McConnell said, “Listen, I think everyone needs to relax.” He said “the last 10 times we raised the debt ceiling, there were things attached to it” – as the White House objected to this year.
“It’s not that unusual.”
However, time is running out. The Speaker of the House promised lawmakers he would abide by the rule to publish any bill for 72 hours before voting, making any action questionable until the end of the week – just days before the potential deadline. The Senate is also expected to pass the package before it can travel to Biden’s office to be signed.
After a weekend of start-stop talks, Biden and McCarthy declared the need for a compromise deal. U.S. financial markets fell last week after trading paused amid a choppy economy.
McCarthy faces a far-right flank in his own party that is likely to reject any deal, leading some Democrats to encourage Biden to resist any compromise with Republicans and simply raise the debt ceiling on his own, an unprecedented and legally burdensome move.
On Tuesday, the leader of the conservative House Freedom Caucus representative, Scott Perry, said: “We all want to stick together. But again, it’s about sticking together around the right thing.
He and others are increasingly skeptical of the June 1 deadline which Treasury Secretary Janel Yellen says is when “it’s very likely” the government won’t be able to pay. all the nation’s bills.
Perry suggested the Treasury Department was going to be “full of cash” on June 15, when quarterly tax payments are due.
“There is absolutely no reason to do this and we all know that,” he said.
As negotiators focus on the more than $100 billion difference between the 2022 and 2023 spending plans as a locus of reduction, other priorities Republicans are pushing for under the deal remain on the table.
Republicans also want to tighten work requirements for government assistance to beneficiaries of the Medicaid health care program, though the Biden administration has countered that millions could lose coverage.
The GOP further wants further food aid cuts by limiting states’ ability to waive work requirements in places with high unemployment. But Democrats have said any changes to work requirements for government assistance recipients are not valid.
GOP lawmakers are also seeking to cut funding for the IRS and, by sparing the defense and veterans accounts from the cuts, would shift the bulk of the spending cuts to other federal programs.
The White House has responded by holding defense and nondefense spending steady next year, which would save $90 billion in fiscal year 2024 and $1 trillion in 10. years.
All parties are considering the possibility of the package including a framework to ease federal regulations and accelerate the development of energy projects. They are almost certain to recover some $30 billion in unspent COVID-19 funds now that the pandemic emergency is officially over.
The president, however, said he’s ruling out the possibility, for now, of invoking the 14th Amendment as a solution, saying it’s an “unresolved” legal issue that will be stuck in court. .
