McCarthy deflects blame for talks stall
U.S. DEBT CEILING
A defiant U.S. House Speaker Kevin McCarthy said Wednesday the debt ceiling standoff was “not my fault” as he sent Republican negotiators to the White House to finish out talks, but warned the two sides need more time as they try to reach a budget deal with U.S. President Joe Biden.
McCarthy said he remained optimistic they could reach an agreement before a deadline as soon as next week, when the Treasury Department could run out of cash to pay its bills. Financial markets are teetering as Washington edges closer to a debt default crisis that would be unprecedented in modern times, sending shockwaves around the globe.
Late in the day, Fitch Ratings agency placed the United States’ AAA credit on “ratings watch negative,” warning of a possible downgrade because of what it called the brinkmanship and political partisanship over lifting the debt ceiling.
The White House blamed the Republicans led by McCarthy for risking a devastating default that would hit “every single part of the country” as they demand “extreme” spending cuts that would hurt millions of Americans.
“We’re not going to default,” McCarthy assured.
The Republican Speaker said the negotiators “made some progress” at the White House. “I want to work as hard as we can and not stop.”
Debt ceiling negotiations are locked on a classic problem that has divided and disrupted Washington before, particularly the last time Republicans used the borrowing limit as leverage to extract priorities a decade ago: Republicans want to roll back federal government spending, while Biden and other Democrats do not.
From the White House, press secretary Karine Jean-Pierre decried what the administration called a “manufactured crisis” set in motion by Republicans pushing “extreme proposals” that would hurt “every single part of the country, whether you’re in a red state or a blue state.”
Time is short to strike a deal. Treasury Secretary Janet Yellen said Wednesday that “it seems almost certain” that the United States would not make it past early June without defaulting.