WASHINGTON (AP) – White House negotiators worked on the U.S. debt limit Thursday with House Speaker Kevin McCarthy’s emissaries on Capitol Hill, going through a second day of direct talks to try to reach an budget deal to avoid a looming economy. crisis
Brown bags of snacks were handed out for lunch in the stately room, signaling a long day ahead.
With a June 1 deadline fast approaching, President Joe Biden and McCarthy used their top representatives to hammer out a deal after a week of talks with a stalled larger contingent.
Delighted, McCarthy said it was important to have an “agreement in principle” this weekend if they hope to reach a House vote next week. “Everybody is working hard.” McCarthy told CNN and others on Capitol Hill.
The White House team also appeared upbeat as they entered the building, but declined comment. They left two hours later, and it was unclear whether talks would continue at the end of the day.
“This doesn’t have to be a crisis,” Vice President Kamala Harris said during a virtual meeting of community leaders Thursday.
“A default could trigger a recession, freeze military paychecks and raise interest rates for years to come,” Harris said. “America has to pay our bills, just like you and your family and other hardworking Americans do every day.”
All parties are scrambling to come up with a budget-cutting deal that Democrats and Republicans can live with, the price to be paid as McCarthy’s newly empowered House Republicans try to extract steep spending cuts. Those cuts would be in exchange for GOP votes to raise the debt limit, now at $31 trillion, and keep paying the nation’s already outstanding bills.
Biden and McCarthy have mostly cooled what had been heated rhetoric about Republican demands. The president said he will review the talks while he is overseas in the coming days for the Group of Seven summit in Japan. Biden cut the rest of his trip short so he could return to Washington early.
“I’m confident that we will get the deal on the budget and America will not default,” Biden said Wednesday before leaving.
Behind closed doors are key personnel who could cut a broad budget deal. Steve Ricchetti, the longtime Biden aide who is now an adviser to the president, along with Office of Management and Budget Director Shalanda Young and Legislative Affairs Director Louisa Terrell, are representing the administration. McCarthy himself said he planned to hold off on some of the talks and has brought in Rep. Garret Graves, R-La., who is a close ally, for Republicans. Another Republican, Rep. Patrick McHenry of North Carolina, chairman of the Financial Services Task Force, rejoined Thursday.
A White House official said Bruce Reed, the deputy chief of staff, is traveling with the president to stay in touch and keep Biden informed.
At stake is federal spending over the next few years as Republicans use the debt ceiling vote, a routine exercise typically conducted in a bipartisan fashion to increase borrowing capacity and pay the nation’s bills, such as a way to extract their budget priorities.
The outlines of a deal that includes some cuts, the rollback of unused COVID-19 money and a framework for discussing new permitting rules to develop energy projects more quickly are taking shape, but details remain sketchy.
McCarthy’s Republicans want to roll back spending to fiscal 2022 levels and limit annual increases to just 1 percent over the next decade, sparing the Defense and Veterans accounts, in what Democrats say would be devastating cuts that would strain many americans
Republicans know their proposal would only touch the nation’s growing debt burden, but they argue spending cuts have to start somewhere to control what they say are unsustainable annual deficits.
Democrats are resisting, and negotiators are seeking budget caps for the next few years as an alternative to caps that would stretch for a decade.
Noticeably absent from the floor of the negotiations are the appropriators of Congress: the presidents of the House and Senate who head the appropriations committees, which actually put the spending plans into motion. It is clear that Democratic appropriators and perhaps even some Republicans would almost certainly resist the levels of cuts being considered.
One area where all parties seem more likely to agree would be the Republican proposal to recover about $30 billion in unspent COVID-19 funds now that the federal government has declared an official end to the pandemic emergency.
Republicans also want to attach their policy priorities to any deal, and that’s a harder sell.
House Democratic Leader Hakeem Jeffries said Thursday that the Republican proposal for stricter work requirements for government aid recipients is a “non-starter.” period Point.”
Jeffries noted that many House Republicans, including McCarthy, voted against enhanced work requirements for food stamp recipients in the Supplemental Nutrition Assistance Program just a few years ago.
“This is a hostage situation,” Jeffries said. “They’re trying to extract ransom notes to avoid a default.”
But Biden opened the door to some additional work requirements for non-healthcare programs like Medicaid, and discussions about food stamps and cash assistance programs are ongoing.
On the permitting changes, Republicans are eager to undo the National Environmental Policy Act, called NEPA, to allow energy projects to be approved and developed more quickly, without years of delays due to challenges and lawsuits.
Biden’s own climate adviser, John Podesta, met with some House Democrats this week as the administration also seeks changes that would more quickly trigger clean energy projects and upgrade transmission lines to combat the shift climatic
But the two parties remain far apart on the size and scope of the reforms they would allow, with several prominent lawmakers, including Sen. Joe Manchin, DW.Va., having their own proposals. It is unclear whether negotiators will be able to reach a final deal on the authorization provisions or if the best they can hope for is a framework that could lead to future discussions between the White House and Congress.
Time is running out before a June 1 deadline to raise the debt limit and avoid what economists warn would be a devastating default, the first of its kind, that would wipe out the economy.
McCarthy has vowed to abide by House rules that require 72 hours’ notice before voting on any bill, meaning a deal is needed this weekend if the House wants to vote before leaving at the end of the next week for the Memorial Day break.
Senate Majority Leader Chuck Schumer told senators Thursday, as they prepared to leave for their own weeklong recess, that they must be ready to return with 24 hours’ notice to vote , if necessary. More likely, the Senate is expected to begin voting when it returns after Memorial Day.
Democrats in the House and Senate are engaging in other strategies, including trying to force a vote to raise the debt limit without the spending cuts Republicans are calling for. Progressives are also pushing Biden to invoke the 14th Amendment to raise the debt ceiling, something the president has indicated he is not yet willing to do.
__ Associated Press writers Kevin Freking, Chris Megerian and Stephen Groves in Washington and White House correspondent Zeke Miller in Hiroshima contributed to this report.
