WASHINGTON (AP) — House negotiators are making progress toward an agreement with the White House to raise the nation’s debt ceiling, racing to close out a deal ahead of a looming deadline to avert a potentially catastrophic government default, Republican Speaker Kevin McCarthy said Friday.
But McCarthy told reporters at the Capitol there was still more work to do.
“I thought we made progress last night, we’ve got to make more progress now,” he said. “Now we’ve got a short timeframe.”
Democratic President Joe Biden and the Republican speaker are straining to strike a budget compromise by this weekend. The two sides are narrowing differences on a two-year agreement that would curb federal spending and lift the borrowing limit ahead of a deadline as soon as June 1 when Treasury could run out of money to pay the nation’s bills.
Any deal would need to be a political compromise, with support from both Democrats and Republicans to pass the divided Congress.
While the contours of the deal have been taking shape to cut spending for 2024 and impose a 1% cap on spending growth for 2025, the two sides remain stuck on various provisions. The debt ceiling, now at $31 trillion, would be lifted for two years to pay the nation’s incurred bills, past the political interference of the presidential election.
A person familiar with the talks said the two sides are “dug in” on whether or not to agree to Republican demands to impose stiffer work requirements on people who receive government food stamps, cash assistance and health care aid, some of the most vulnerable Americans.
Yet both Biden and McCarthy expressed optimism heading into the weekend that the gulf between their positions could be bridged.
In remarks at the White House on Thursday, Biden said, “It’s about competing versions of America.”
“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.”
House Republicans have pushed the issue to the brink, displaying risky political bravado in leaving town for the Memorial Day holiday. The U.S. could face an unprecedented default hurling the global economy into chaos.
Lawmakers are tentatively not expected back at work until Tuesday, just two days from the early June deadline when Treasury Secretary Janet Yellen has said the U.S. could start running out of cash to pay its bills and face a federal default.
Biden will also be away this weekend, departing Friday for the presidential retreat at Camp David, Maryland, and Sunday for his home in Wilmington, Delaware. The Senate is on recess and will return after Memorial Day.
Weeks of negotiations between Republicans and the White House have 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.
The White House has offered to freeze next year’s 2024 spending at current levels and restrict 2025 spending, but the Republican leader says that’s not enough.
“We have to spend less than we spent last year. That is the starting point,” said McCarthy.
