Negotiators for House Speaker Kevin McCarthy (R-Calif.) and the White House briefly resumed talks to raise the nation’s borrowing limit on Friday evening hours after an abrupt “pause” in discussions.
“At the speaker’s request, we’re going back in, and we’re going to keep talking,” Rep. Patrick McHenry (R-NC) told reporters before entering the meeting room on Capitol Hill where discussions with the two lead White House negotiators – Office of Management and Budget Director Shalanda Young and President Biden adviser Steve Ricchetti – went on for about an hour and a half.
“At the direction of the speaker of the House, we reengaged, had a very, very candid discussion talking about where we are, talking about where things need to be, what’s reasonable and acceptable,” Rep. Garret Graves (R-La.), McCarthy’s lead negotiator, told reporters after Friday night’s meeting.
“This wasn’t a negotiation tonight. This was a candid discussion about realistic numbers, a realistic path forward and something that truly changes the trajectory of this country’s spending and debt problem,” he added.
When asked by reporters if he was confident a framework to raise the debt ceiling could be reached by this weekend, McHenry responded, “No.”
The North Carolina Republican and chairman of the House Financial Services Committee also said the meeting did not increase his confidence that a deal could be reached before Monday.
Ricchetti told reporters that he was leaving the Capitol “for the time being” but noted, “We’re going to keep working tonight.”
The brief restart of talks between Republican lawmakers and Biden’s team came hours after discussions came to a screeching halt Friday as McCarthy said negotiations needed a “pause” and the White House admitted “real differences” were still gumming up the works.
“We’ve got to get movement by the White House, and we don’t have any movement yet,” McCarthy told reporters on Capitol Hill, insisting that Biden must agree to some spending cuts in order for discussions over raising the debt ceiling to continue.
“So, yeah, we’ve got to pause,” the House speaker said.
Before Friday night’s restart, McHenry observed that “there is a ‘serious gap”’ between the sides.
“We’re in a tough spot,” he said.
Graves also indicated that significant gaps remain between House Republicans and the Biden administration.
“It’s time to press pause because it’s just not productive,” Graves told reporters, adding that talks have turned “just unreasonable.”
On Friday, a White House official speaking on the condition of anonymity characterized the negotiations with McCarthy as “difficult.
“There are real differences between the parties on budget issues, and talks will be difficult,” the official said. “The president’s team is working hard towards a reasonable bipartisan solution that can pass the House and the Senate.”
The president and House speaker have fewer than two weeks to strike a deal to raise the debt ceiling before the potentially disastrous consequences of a debt default.
The Treasury Department has warned that it will run out of funds to pay incurred debt – currently at $31 trillion – on June 1.
Friday morning’s negotiations at the Capitol ended abruptly when talks hit a snag on the third day of closed-door conferencing.
White House negotiators said they are “playing it by ear” when asked about the likelihood of more meetings heading into the weekend.
The president, who is attending the G-7 summit in Japan, announced earlier this week that his overseas trip would be cut short while the financial crisis looms and that he plans to return to the White House on Sunday.
Biden, 80, has not commented on the debt-ceiling talks while in Japan.
White House press secretary Karine Jean-Pierre said the president would be briefed on the status of the negotiations Friday night.
In April, House Republicans passed legislation that would allow the federal government to borrow another $1.5 trillion or raise the debt ceiling until March 31, 2024 – whichever milestone could be reached first – in exchange for discretionary-spending cuts for non-defense programs.
The legislation would also limit the growth of future expenditures to 1% per year for the next decade.
The bill was dead on arrival in the Democratic-controlled Senate, and Biden said he would not sign it even if it were to pass the upper chamber.
GOP negotiators say they won’t accept any deal from the White House that raises spending next year.
“Look, we can’t be spending more money next year,” McCarthy said at the Capitol. “We have to spend less than we spent the year before. It’s pretty easy.”
McCarthy is facing pressure from far-right members of the House to extract as many spending cuts as possible from the White House before making a deal.
Four Republicans – Reps. Matt Gaetz (R-Fla.), Ken Buck (R-Colo.), Tim Burchett (R-Tenn.) and Andy Biggs (R-Ariz.) – voted against the House GOP’s debt-ceiling bill in April, arguing that it didn’t go far enough.
Markets had been rising this week in anticipation of a deal, but Friday, the three major US indexes were all down after the abrupt end of talks on Capitol Hill.
The S&P 500 went from being up 0.3% to down 0.1% and the Dow Jones Industrial Average went from a gain of 117 points to a loss of about 90 points.
Senate Minority Leader Mitch McConnell on Friday blamed Biden for negotiations that are now coming down to the wire.
He said the president “waited months before agreeing to negotiate” with McCarthy and that “they are the only two who can reach an agreement.
“It is past time for the White House to get serious. Time is of the essence,” McConnell wrote on Twitter.
If a deal between McCarthy and Biden is struck, another obstacle will still be getting Senate Democrats, who are wary of dealing with Republicans, onboard with the proposal.
Some Democrats have indicated that they refuse to vote for any bill that would protect defense and veterans accounts from spending caps, arguing that the burden of cuts would then fall too heavily on other domestic programs.
On Friday, 66 members of the Congressional Progressive Caucus urged Biden to take unilateral action to raise the debt ceiling by invoking the 14th Amendment which states that “[t]he validity of the public debt of the United States, authorized by law … shall not be questioned.”
“In light of unremitting efforts by Congressional Republicans to hold the economic health of our nation hostage, we as members of the Congressional Progressive Caucus write to urge you to fulfill the Executive’s Constitutional duty to faithfully and impartially administer the funds already enacted by law at the direction of Congress,” the Democratic House lawmakers write in their letter to Biden.
“We encourage you to invoke the 14th Amendment of the Constitution,” the letter reads.
Last week, Biden said he wouldn’t rule out the unprecedented move of using the 14th Amendment to raise the nation’s borrowing limit, but acknowledged the move would be open to lengthy legal challenges and thus he would prefer to strike a deal with McCarthy.
The US Chamber of Commerce, the largest business group in the country, warned Biden in its own letter sent Friday of the potentially disastrous economic consequences that may arise if he invokes the 14th Amendment.
“It is the Chamber’s view that attempting to invoke so-called ‘powers’ under the 14th Amendment would be as economically calamitous as a default triggered by a failure to lift the debt limit in a timely manner,” Neil Bradley, the Chamber’s chief policy officer, wrote in the missive.
“Simply put, there is no alternative to reaching a bipartisan agreement to raise the statutory debt limit,” Bradley argues
