WEEKEND DEBT CEILING DEAL SOUGHT
McCarthy says ‘agreement in principle’ needed
Negotiators from the White House labored Thursday over the U.S. debt limit with House Speaker Kevin McCarthy’s emissaries at the Capitol, grinding through head-to-head talks trying to strike a budget deal to avert a looming economic crisis.
With hopes for a breakthrough as soon as this weekend, President Joe Biden and McCarthy tapped their top representatives to work out a deal after talks with a larger contingent stalled.
Upbeat, McCarthy said it was important to have an “agreement in principle” by the weekend if they hope to get to a House vote next week. That would leave enough time for the Senate to act, too, ahead of a deadline as soon as June 1.
“Everyone’s working hard.” McCarthy told CNN and others at the Capitol.
The White House team also appeared upbeat as they entered the building, but declined comments and departed two hours later. They were expected to be back at it today and into the weekend.
“This does not have to be a crisis,” Vice President Kamala Harris said during a virtual meeting of community leaders on Thursday.
“A default could trigger a recession, stop military paychecks and raise interest rates for years to come,” Harris said. “America must pay our bills, just like you
and your family and other hardworking Americans do every single day.”
All sides are racing to devise 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 reductions. Those cuts would be in exchange for GOP votes to raise the debt limit, which is now $31 trillion, and keep paying the nation’s alreadydue bills.
Biden and McCarthy have mostly cooled what had been heated rhetoric over the Republican demands. The president said he would be checking on talks as he is abroad for the next several days at the Group of Seven summit in Japan. Biden cut short the rest of his trip to Papua New Guinea and Australia so he could return early to Washington.
“I’m confident that we’ll get the agreement on the budget and America will not
default,” Biden said Wednesday before he departed.
Behind closed doors are the key personnel who could cut a sweeping budget deal. Steve Ricchetti, Biden’s longtime aide who is now counselor 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 stop by some of the talks, and has tasked Rep. Garret
Graves, R-La., who is a close ally, for the Republicans. Another Republican, Rep. Patrick McHenry of North Carolina, the chair of the Financial Services team, newly joined Thursday.
A White House official said Bruce Reed, the deputy chief of staff, is traveling with the president to keep in contact and keep Biden informed.
“We’ve got a lot more work to do,” McHenry said after Thursday’s session.
At stake is federal spending over the next several years as Republicans use the debt ceiling vote, a routine exercise that’s typically done in a bipartisan way to raise the borrowing capacity and pay the nation’s bills, as a way to push their budgeting priorities.
The contours of a deal that includes some cuts, rescinding unused COVID-19 money and a framework to discuss new permitting rules to more quickly develop energy projects are taking shape, but the details remain daunting.
McCarthy’s Republicans want to roll back spending to fiscal 2022 levels and cap annual increases at just 1 percent over the next decade — sparing Defense and Veterans accounts — in what Democrats say would be devastating cuts inflicting hardship on many Americans.
Time is short ahead of the deadline as soon as June 1 to raise the debt limit and avoid what economists warn would be a devastating default.
McCarthy, R-Bakersfield, has vowed to abide by House rules that require 72 hours notice before voting on any bill, meaning an agreement is needed this weekend if the House wants to vote before it leaves for the Memorial Day recess.
Senate Majority Leader Chuck Schumer, D-N.Y., told senators Thursday, as they prepared to depart for their own weeklong recess, said they need to be ready to return with 24 hours notice to vote, if needed.
More likely, the Senate would be expected to start voting when it returns after Memorial Day.