Washington: debt ceiling Negotiators for President Joe Biden and House Speaker Kevin McCarthy are holed up for more talks at the Capitol Tuesday, but Republicans He warned of a “lack of urgency” in the White House to resolve the budget standoff in time to avert a potentially chaotic federal default.
With only a week left before the June 1 deadline, the Democratic president and Republican speaker are staring down a financial crisis. A failure to strike a deal would be unprecedented and would certainly throw US financial markets into turmoil, causing economic pain at home and abroad.
Behind closed doors, McCarthy has urged the slender House Republican majority to “stick together” despite their factions while he negotiates the strongest possible deal for conservatives, said lawmakers who left the special session.
“We’re not there yet,” McCarthy said at the Capitol, and confirmed that he would not introduce any bill that “doesn’t spend us less than we’ve spent this year.”
Rank-and-file Republican lawmakers have been told they can move ahead with the week of recess planned around Memorial Day away from Washington, which is set to begin after Thursday’s session. But McCarthy warned them to be on a 24-hour phone call back to vote on any deal.
As we approach the second week, negotiations over raising the state’s debt limit, which now stands at $31 trillion, should not have reached this stage — a crisis in the making.
The White House insisted early on that it was unwilling to compromise on the need to pay the nation’s bills, and demanded that Congress simply raise the bar as it had done so many times before without strings attached.
But newly elected Speaker McCarthy, Calif., visited Biden in the Oval Office in February, urging the president to come to the negotiating table on a budget package that would reduce spending and swell the country’s post-coronavirus deficit in exchange for a vote to allow future debt.
The two men said late Monday after a crucial meeting at the White House — just after the president returned from the G7 summit in Japan — that the talks had been productive.
But with little time to reach an agreement, they are scrambling for a compromise that could be quickly approved by the Republican House and Democratic Senate and signed into law.
Negotiations focus on finding an agreement on a 2024 budget cap. Republicans insist government spending next year will be lower than it is now, but the White House is instead offering to freeze spending at the current 2023 numbers.
Agreement on this basic spending level is vital – to enable McCarthy to discipline spending for conservatives while not being so severe that it would chase away the Democratic votes that would be needed in a divided Congress to pass any bill.
The White House continues to say the deficit can be reduced by ending tax breaks for wealthier households and some businesses, but McCarthy said he told the president in the February meeting that increased revenue from the tax increases was off the table.
Negotiators are now also discussing the duration of a 1% cap on future annual spending growth. Republicans have lowered their demand for a 10-year cap to six years, but the White House has offered only one year, for 2025.
Normally, the debt ceiling has been raised for the duration of a budget deal, and in these negotiations, the White House is seeking a two-year agreement that would carry over until after the presidential election.
More urgency is needed, said Republican chief negotiator Rep. Patrick McHenry of North Carolina, who joined the speaker in the Oval Office Monday night. Talks resumed Monday night at the Capitol for two hours, and resumed again Tuesday afternoon.
“What I feel from the White House is the lack of urgency,” McHenry told reporters.
But regarding the Senate, Republican Leader Mitch McConnell said, “Look, I think everyone needs to relax.” He said that “the last 10 times we’ve raised the debt ceiling, there’s been stuff attached to it” — he also opposed the White House this year.
“This is not unusual.”
However, time is running out. And the House speaker promised lawmakers he would abide by the rule to post any bill 72 hours before a vote, making any questionable action until the end of the week — just days before a potential deadline. The Senate will also have to pass the package before it goes to Biden’s office to be signed.
After a weekend of start-and-stop talks, both Biden and McCarthy announced the need to finalize a compromise deal. US financial markets fell last week after negotiations stalled amid a tense economy.
McCarthy faces a hard right wing in his party that is likely to reject any deal, and this has led to Democrats To encourage Biden to resist any compromise with Republicans and raise the debt ceiling on his own, an unprecedented and legally charged measure.
On Tuesday, Conservative House Freedom Caucus leader Scott Perry said: “We all want to stick together. But again, it’s sticking together about the right thing.”
He and others are skeptical of the June 1 deadline that Treasury Secretary Janelle Yellen said is when it is “extremely likely” that the government will not be able to pay all of the country’s bills.
Perry suggested that the Treasury would be “full of cash” on June 15 when the quarterly tax payments are due.
“There is absolutely no reason to do that,” he said, “and we all know that.”
While negotiators focus on the more than $100 billion difference between the 2022 and 2023 spending plans as a place to cut, other priorities pushed by Republicans as part of the deal remain on the table.
Republicans also want to bolster work requirements for state aid for Medicaid recipients, though the Biden administration has countered that millions of people could lose coverage.
In addition, the GOP wants new cuts to food aid by restricting states’ ability to waive labor requirements in places with high unemployment. But Democrats have said any changes to work requirements for state aid recipients are irregular.
GOP lawmakers are also seeking cuts in IRS funding, and by setting aside the Defense and Veterans Account cuts, they will shift the bulk of the spending cuts to other federal programs.
The White House responded by keeping defense and non-defense spending flat next year, which would save $90 billion in the 2024 budget and $1 trillion over 10 years.
All parties are looking forward to the possibility of the package including a framework to ease federal regulations and accelerate the development of energy projects. They are all certain to recover about $30 billion in unspent COVID-19 money now that the pandemic emergency is officially lifted.
However, the president said he is ruling out the possibility of invoking the Fourteenth Amendment as a solution for now, saying it is an “unresolved” legal issue that would become tied up in the courts.


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