No debt ceiling deal as meetings grind on

WASHINGTON — Debt ceiling negotiators for President Joe Biden and House Speaker Kevin McCarthy holed up for more talks at the Capitol Tuesday, but Republicans warned of a “lack of urgency” at the White House to resolve the budget standoff in time to avert a potentially chaotic federal default.

With barely a week to go before a deadline as soon as June 1 the Democratic president and the Republican speaker were staring down a financial crisis. Failure to strike a deal would be unprecedented, and certain to throw U.S. financial markets into turmoil, inflicting economic pain at home and abroad.

Behind closed doors, McCarthy urged his slim House Republican majority to “just stick together” despite their own factions as he negotiates the strongest deal possible for conservatives, said lawmakers exiting the private session.

“We’re not there yet,” McCarthy said at the Capitol, reiterating he won’t bring any bill forward “that doesn’t spend less than we spent this year.”

Rank-and-file Republican lawmakers were told they could proceed with their planned recess week around Memorial Day away from Washington, set to begin after Thursday’s session. But McCarthy warned them to be on 24-hour call to return for voting on any deal.

Both men said late Monday after a crucial meeting at the White House — after the president returned from the Group of Seven summit in Japan — that talks were productive.

But with time short to strike a deal, they are laboring to come up with a compromise that could be approved quickly by the Republican House and the Democratic Senate and be signed into law.

Negotiations are focused on finding agreement over a 2024 budget year limit. Republicans insist that next year’s government spending be less than it is now, but the White House instead is offering to freeze spending at current 2023 numbers.

The White House continues to argue that deficits can be reduced by ending tax breaks for wealthier households and some corporations, but McCarthy said he told the president at their February meeting that raising revenue from tax hikes is off the table.

The negotiators are now also debating the duration of a 1 percent cap on annual spending growth going forward, with Republicans dropping their demand for a 10-year cap to six years, but the White House offering only one year, for 2025.

Typically, the debt ceiling has been lifted for the duration of a budget deal, and in this negotiation the White House is angling for a two-year agreement that would push past the presidential elections.

“What I sense from the White House is a lack of urgency,” Rep. Patrick McHenry, a top Republican negotiator, told reporters.

But on the Senate side, Republican leader Mitch McConnell said, “Look, I think everybody needs to relax.” He said that “the last 10 times we raised the debt ceiling, there were things attached to it” — as the White House has opposed this year. “This is not that unusual.” However, time is growing short. The House speaker promised lawmakers he will abide by the rule to post any bill for 72 hours before voting, making any action doubtful until the end of the week — just days before the potential deadline. The Senate would also have to pass the package before it could go to Biden’s desk to be signed.