WASHINGTON (AP) – Debt limit negotiations between the White House and House Republicans stalled over the weekend with tough talk but little action as President Joe Biden and world leaders watched from afar. hoping that high-stakes discussions would move forward to avoid a potentially catastrophic federal. by default.
In a sign of a renewed negotiating session, food was brought into the Capitol negotiating room Saturday morning, only to be brought back hours later. No meeting was expected. It was another day of departures with no outward signs of progress, although talks could intensify again on Sunday.
The Biden administration and House Speaker Kevin McCarthy, R-Calif., are fighting for a budget deal that would pave the way for raising the nation’s debt limit. Republicans are calling for big spending cuts that Democrats oppose as too severe. The two sides face a deadline as soon as June 1 to raise their debt limit, now at $31 trillion, so the government can keep paying the nation’s bills.
“The president’s team put an offer on the table that was a major step backwards and contained a set of extreme partisan demands that both Houses of Congress could never pass,” said press secretary Karine Jean- Pierre in a statement Saturday afternoon.
“Let’s be clear: the president’s team is ready to meet at any moment,” Jean-Pierre said, adding that the Republican leadership is forced to its extreme wing by threatening default.
McCarthy tweeted that it was the White House that was “backing down on negotiations.”
He said the “socialist wing” of the Democratic party appears to be in control, “especially with President Biden out of the country.”
Biden, who attended a meeting of world leaders in Japan, tried to reassure them on Saturday that the United States would not default, a scenario that would shake the world economy. He said he felt there was progress in the talks.
“The first meetings were not that progressive, the second were, the third was,” he said. The president added that he believes that “we will be able to avoid a breach and we will do something decent”.
For months, Biden had refused to engage in debt limit talks, insisting that Congress should not play political games by trying to use the debt limit vote as leverage to extract other policy priorities.
But as the deadline approaches as soon as June 1, when the Treasury says it could run out of cash and Republicans put their own legislation on the table, the White House launched a budget deal that would unblock the vote on the debt limit.
The latest White House proposal would keep discretionary spending flat from current 2023 levels through fiscal 2024, according to a person familiar with the talks who spoke on condition of anonymity to discuss them.
That would essentially reduce spending in real terms, when adjusted for inflation, the person said.
The proposal is likely to fall short of what McCarthy wants for a deal, as he faces a far-right wing demanding budget cuts. House Republicans passed their own bill that would cut spending to fiscal 2022 levels and impose a 1 percent cap on spending for a decade.
In the negotiations, House Republicans have asked for defense spending to increase for the next fiscal year 2024, even as they want overall spending to decrease, the person said. The person said education, health care, Meals on Wheels and other programs would “bear the full brunt of the hard cuts.”
Republicans have refused to roll back Trump-era tax breaks for corporations and wealthy families, as proposed in Biden’s own budget.
The negotiations leading up to the weekend had been hectic. McCarthy said Friday it was time to “pause” the talks, but then the two sides met again in the evening, only to quickly call it quits for the night.
“We re-engaged, we had a very, very frank discussion,” Rep. Garret Graves, R-La., a negotiator for McCarthy, said Friday evening.
As the White House team left the overnight session, Biden adviser Steve Ricchetti, who is leading the talks for Democrats, said he was hopeful. “We will continue to work,” he said.
McCarthy had said that resolving the standoff is “easy,” if only the Biden team would agree to some spending cuts that Republicans are demanding. The biggest impasse was over the 2024 budget amount, according to a person briefed on the talks who spoke on condition of anonymity to discuss them. Democrats say the sharp cuts Republicans have put on the table would be potentially harmful to Americans, and they insist Republicans agree to raise taxes on the wealthy, as well as cut spending, to close the deficit.
Wall Street fell on Friday as trading halted abruptly. Experts have warned that even the threat of a debt default could trigger a recession.
Republicans argue that the nation’s deficit spending must be brought under control, with the goal of rolling spending back to fiscal 2022 levels and restraining future growth. But Biden’s team counters that the caps proposed by Republicans in the House-passed bill would mean cuts of 30 percent in some programs if Defense and veterans are spared, according to a memo from the Office of Management and Budget.
Any deal would need support from both Republicans and Democrats to find approval in a divided Congress and be passed into law. Negotiators are seeking a tighter budget cap deal of several years, rather than the decade-long caps that Republicans initially wanted, and clawing back about $30 billion of unspent COVID-19 funds.
Still up for debate are policy changes, including a framework to allow reforms to speed up the development of energy projects, as well as the Republican push to impose work requirements on recipients of government aid that Biden has been open to, but the leader House Democrat Hakeem Jeffries of New York said he was not a “starter.”
McCarthy faces pressure from his far-right flank to cut the strongest possible deal for Republicans, and risks threatening his leadership as speaker if he fails to do so. Many House Republicans are unlikely to accept any deal with the White House.
Biden faces further pushback from Democrats, especially progressives, who argue the cuts will fall too far into domestic programs Americans trust.
___
Associated Press writers Zeke Miller and Josh Boak in Hiroshima, Japan, and AP congressional correspondent Lisa Mascaro and AP writer Farnoush Amiri in Washington contributed to this report.
