Debt ceiling talks continue, but Republicans say there is a “lack of urgency” from the White House

WASHINGTON. Debt ceiling Negotiations for President Joe Biden and House Speaker Kevin McCarthy remained for more negotiations on Capitol Hill on Tuesday, however. Republicans warned of a “lack of urgency” in the White House to resolve the budget standoff in time to prevent a potentially chaotic federal default.
With barely a week to go before the June 1 deadline, the Democratic president and the Republican speaker were looking at the financial crisis. A failure of the deal would be unprecedented and would certainly send US financial markets into turmoil, causing economic pain at home and abroad.
Behind closed doors, McCarthy urged the House Republican majority to “just stick together” despite their factionalism as he negotiates the strongest possible deal for conservatives, lawmakers said outside the private session.
“We’re not there yet,” McCarthy said on Capitol Hill, reiterating that he won’t introduce any bill “that doesn’t spend less than what we spent this year.”
Republican lawmakers have been told they may continue their planned vacation week away from Washington around Memorial Day, which is set to begin after Thursday’s session. But McCarthy warned them to call back within 24 hours to vote on any deal.
In its second week, negotiations to raise the nation’s debt limit, now at $31 trillion, should never have reached this point, a crisis in the making.
The White House said early on that it did not want to trade off the need to pay the nation’s bills by demanding that Congress simply eliminate the cap, as it has done many times in the past without any strings attached.
But Speaker-elect 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 reduce spending and the nation’s growing post-Covid deficit instead. vote to authorize future debt.
Both said after a crucial meeting at the White House late Monday, when the president returned from a Group of Seven summit in Japan, that the talks had been productive.
But in the short term to reach an agreement, they are working to reach a compromise that can be quickly approved by the Republican House and Democratic Senate and signed into law.
Negotiations are focused on finding an agreement on the cap for the 2024 budget year. Republicans have pushed for lower government spending next year than it is now, but the White House is instead proposing to freeze spending at current 2023 numbers.
An agreement on that spending level is vital to give McCarthy a chance to secure spending restraint for conservatives while not being so tough as to take away the Democratic votes needed to pass any bill in a divided Congress.
The White House continues to insist that deficits can be reduced by ending tax breaks for wealthier households and some corporations, but McCarthy said he told the president during a meeting in February that raising revenue from tax increases was not on the table.
Negotiators are also now debating the length of the 1% cap on annual spending growth, with Republicans reducing their request for a 10-year cap to six years, but the White House offering just one year, for 2025.
Typically, the debt ceiling is lifted for the duration of a budget agreement, and in these negotiations the White House is aiming for a two-year deal that would run after the presidential election.
North Carolina Republican chief negotiator Patrick McHenry, who joined a spokesman in the Oval Office on Monday night, said there needs to be more urgency. Negotiations resumed Monday night at the Capitol for two hours and resumed Tuesday afternoon.
“What I sense from the White House is a lack of urgency,” McHenry told reporters.
But 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 were things that came with it” that the White House opposed this year.
“This is not so unusual.”
However, time is running out. The House speaker promised lawmakers he would stick to the rule of releasing any bill 72 hours before a vote, making any action until the end of the week, days before a possible deadline, moot. The Senate must also pass the package for it to go to Biden’s desk for signature.
After a weekend of initial talks, both Biden and McCarthy announced the need to close a compromise deal. US financial markets tumbled last week after talks stalled amid a troubled economy.
McCarthy faces a right-wing wing in his party that is likely to reject any deal, and that has led to some Democrats 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, MP Scott Perry of the Conservative House Freedom Caucus said: “We all want to stay together. But again, it sticks around the right thing.”
He and others are increasingly skeptical of the June 1 deadline, which Treasury Secretary Janet Yellen has said is “very likely” the government will not be able to pay all the nation’s bills.
Perry suggested the Treasury Department would be “flushed with cash” on June 15, when quarterly tax payments are due.
“There’s absolutely no reason to do that, and we all know that,” he said.
As negotiators focus on the $100 billion difference between the 2022 and 2023 spending plans as a place for cuts, other priorities that Republicans are pushing as part of the deal remain on the table.
Republicans also want to strengthen work requirements for Medicaid recipients in the health care program, although the Biden administration has countered that millions could lose coverage.
The GOP also wants new cuts to food aid, limiting states’ ability to waive work requirements in areas with high unemployment. But Democrats say any changes to work requirements for public assistance recipients are a non-starter.
GOP lawmakers also seek to cut funding for the IRS and, sparing the defense and veterans accounts from cuts, would shift most of the spending cuts to other federal programs.
The White House countered by keeping defense and non-defense spending in place next year, which would save $90 billion in the 2024 budget year and $1 trillion over 10 years.
All parties have noted the potential for the package to include a framework to ease federal regulations and speed up the development of energy projects. All of them, however, are sure to withdraw about $30 billion in unspent COVID-19 funds now that the pandemic emergency has officially been lifted.
The president, however, said he ruled out using the 14th Amendment as a solution for now, saying it was an “unsettled” legal issue that would be tied up in the courts.

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