McCarthy: Debt Limit Impasse Persists, But Agreement is ‘Possible’ By Week’s End.
House Speaker Kevin McCarthy reported that Republicans and the White House were “far apart” as the debt limit impasse persisted on Tuesday after a high-stakes meeting with the nation creeping closer to default.
“We’ve got a lot of work to do in a short amount of time,” McCarthy said after the meeting at the White House on Tuesday. “But we are where we are.”
Since the leaders first met last week, propelled by new projections that the government could run out of money to pay its bills as early as June 1, staff members have carried out talks in an effort to move things forward before another meeting at the White House. While Biden and others in the administration had been optimistic about the talks heading into the meeting, McCarthy sang a different tune.
After Tuesday’s meeting, the California Republican appeared to remain unconvinced, telling reporters that he’s “not more optimistic” about a debt limit agreement. Still, he noted that the meeting yielded changes to the scope and structure of the negotiations, with Biden appointing people to negotiate with McCarthy’s staff, making it a “better process.”
“It is possible to get a deal by the end of the week,” McCarthy said. “It’s not that difficult to get to an agreement.”
Indeed, the mood appeared notably improved after Tuesday’s meeting compared to when the leaders gathered a week earlier. Senate Majority Leader Chuck Schumer called the meeting “good and productive,” adding that “everyone agreed default would be the worst outcome,” after he warned the week prior that McCarthy had refused to take default off the table.
“We don’t have much time, but default is just the worst, worst alternative, and having a bipartisan bill is the only way we’re going to avoid default,” Schumer said, noting that all the leaders agreed that a bipartisan bill is needed.
House Republicans passed legislation last month that would raise the debt limit tied to spending cuts – some of which take aim at Biden’s key legislative achievements. But the White House has remained adamant that the debt limit should not be leveraged, promising to veto the bill, which Schumer has also pledged has no prospects in the upper chamber.
Even so, Biden’s no-negotiations stance has seemed to soften in recent days, though Democrats have made clear that the willingness to negotiate over spending cuts is part of a separate process, happening at the same time as conversation around hiking the debt ceiling.
“Democrats welcome a debate about this year’s budget,”
Schumer said ahead of the meeting on Tuesday. “For decades, both parties have regularly worked out their differences about spending and revenues throughout the appropriations process. That’s what’s happening right now, while we separately but simultaneously work to avoid default.”
White House press secretary Karine Jean-Pierre fielded a number of questions from reporters on Tuesday about the negotiations stance, which she argued has remained consistent.
“The way that we see these conversations – and we continue to be clear, default is not negotiable, it should be done without negotiations – that has not changed with us,” she said, reiterating that Biden is engaged in negotiations on the budget, not the debt ceiling.
But Republicans have criticized Biden for waiting so long to negotiate – no matter how the conversations may be characterized.
“As the debt ceiling conversations – I’m not even sure if they’re negotiations – continue, the House, as has been pointed out many times, is the only body that has actually acted to address the debt ceiling,” House Majority Leader Steve Scalise said Tuesday. “The question that we’ve raised is: Why are they waiting until the midnight hour?”
The meeting came after Treasury Secretary Janet Yellen sent Congress an updated estimate on Monday of the x-date, where she reaffirmed that the government could run out of money as soon as June 1.
“Time is running out,”
Yellen said at a community banking conference on Tuesday, explaining that there are no “good options” for the Treasury Department to take should Congress fail to act. “The U.S. economy hangs in the balance. The livelihoods of millions of Americans do too.”
But without a breakthrough on Tuesday, the path forward still appears riddled with hurdles, as Biden is set to leave for a trip overseas on Wednesday – which was cut short due to the debt ceiling standoff – and the Senate is scheduled to depart for recess come week’s end.
Meanwhile, McCarthy warned earlier this week that a deal must be reached by the weekend to have enough time to approve the legislation before a default.
The White House seemed to agree with McCarthy’s urgency.
“This should have been done some time ago,” Jean-Pierre said. “So if they’re so concerned about the timeline, then they should get to work and do their constitutional duty.”