Debt ceiling talks teeter on brink
WASHINGTON — House Republicans pushed debt ceiling talks to the brink on Thursday, displaying risky political bravado in preparing to leave town for the holiday weekend just days before the U.S. could face an unprecedented default.
However, Speaker Kevin McCarthy also said he had directed his negotiating team "to work 24/7 to solve this problem."
At the Capitol, McCarthy, R-Calif., said "every hour matters" in talks with President Joe Biden's team as they try to work out a budget agreement. Republican are demanding spending cuts the Democrats oppose as their price for raising the legal debt limit.
"We've been taking to the White House all day," he told reporters in the evening. "We're working hard to make it happen."
In remarks at the White House, Biden said, "It's about competing versions of America."
Yet both men expressed optimism that the gulf between their positions could be bridged.
The White House said discussions with the Republicans were productive, including by video conference Thursday, though serious disagreements remained as the president fights for his priorities.
"The only way to move forward is with a bipartisan agreement," Biden said. "And I believe we'll come to an agreement that allows us to move forward and protects the hardworking Americans of this country."
As the deadline nears, it's clear the Republican speaker — who leads a party whose hard-right flank lifted him to power — is now staring down a potential crisis.
Lawmakers are tentatively not expected back at work until Tuesday, just two days from June 1, when Treasury Secretary Janet Yellen said the U.S. could start running out of cash to pay its bills and face a federal default.
Biden will also be away, departing Friday for the presidential retreat at Camp David and Sunday for his home in Wilmington, Delaware. The Senate is on recess and will be until after Memorial Day.
Meanwhile, Fitch Ratings agency placed the United States' AAA credit on "ratings watch negative," warning of a possible downgrade.
Democratic lawmakers lined up on the House floor as the workday ended to blame "extreme" Republicans for the risky potential default. "Republicans have chosen to get out of town before sundown," said House minority leader Hakeem Jeffries of New York.
Weeks of negotiations between Republicans and the White House failed to produce a deal — in part because the Biden administration resisted negotiating with McCarthy over the debt limit, arguing that the country's full faith and credit should not be used as leverage to extract other partisan priorities.
McCarthy is holding out for steep spending cuts that Republicans demand in exchange for their vote to raise the nation's borrowing limit. The White House offered to freeze next year's 2024 spending at current levels and restrict 2025 spending, but the Republican leader says that's not enough.
One idea is to set those topline budget numbers but then add a "snap-back" provision that enforces the cuts if Congress is unable during its annual appropriations process to meet the new goals.
Pressure is bearing down on McCarthy from the House's right flank Freedom Caucus not to give in to any deal.
"Don't take an exit ramp five exits too early," said Rep. Chip Roy, R-Texas, a Freedom Caucus member. "Let's hold the line."
Former President Donald Trump has encouraged Republicans to "do a default" if they don't get the deal they want from the White House. McCarthy said Trump told him, "Make sure you get a good agreement."
Failure to raise the nation's debt ceiling, now at $31 trillion, to pay America's already incurred bills would risk a potentially chaotic federal default. Anxious retirees and social service groups are among those already making default contingency plans.
Even if negotiators strike a deal, McCarthy promised lawmakers he will abide by the rule to post any bill for 72 hours before voting — now likely Tuesday or even Wednesday. The Democratic-held Senate vowed to move quickly to send the package to Biden's desk, right before next Thursday's possible deadline.