Days from the deadline, President Joe Biden and House Speaker Kevin McCarthy hammered out a two-year budget deal aimed at curbing federal deficits in exchange for lifting the nation. debt ceiling and prevent an economic disaster government default.
the Democratic president and Republican speaker hopes to work out a compromise on the budget this week. With Republicans pushing for steep cuts, the two sides have been unable to agree on spending levels for 2024 and 2025. Any deal would have to be a political compromise, with support from those Democrats and Republicans to pass a divided Congress.
But the pace of the budget is not the only hang-up.
A person familiar with the talks said the two sides were “wrangling” over whether or not to agree to Republican demands to impose more restrictions. job requirements of people who receive government food stamps, cash assistance and health care assistance, some of the most vulnerable Americans.
Yet both Biden and McCarthy expressed optimism heading into the weekend that the gulf between their positions could be bridged. A two-year deal would raise the debt limit for that period, after the 2024 presidential election.
“We know it’s not going to be easy,” said McCarthy, R-Calif., as he left the Capitol for Thursday night.
McCarthy said, “It’s hard, but we’re working and we’re going to keep working until we get it done.”
House Republicans have pushed the issue to the brink, showing the dangerous political bravado of leaving town for the Memorial Day holiday. The US may face an unprecedented default as soon as June 1, after global economy into chaos.
In White House speeches, Biden said, “This is about competing versions of America.”
“The only way forward is a bipartisan agreement,” Biden said Thursday. “And I believe we will come to an agreement that allows us to continue and protect the hardworking Americans of this country.”
Lawmakers are not expected to return to work until Tuesday, just two days from early June when Treasury Secretary Janet Yellen said the U.S. could start running out of money to pay its bills and -face a federal default.
Biden will also be gone this weekend, leaving Friday for a presidential retreat in Camp David, Maryland, and Sunday for his home in Wilmington, Delaware. The Senate is in recess until after Memorial Day.
Meanwhile, the Fitch Ratings agency placed AAA credit in the United States “Ratings are looking negative,” warning of possible downgrade.
Weeks of negotiations between Republicans and the White House failed to produce a deal — in part because the Biden administration resisted negotiating with McCarthy on the debt limit, arguing that the nation’s full faith and credit was not should be used as leverage to get other partisan priorities. .
The White House has offered to freeze spending through 2024 next year at current levels and tighten spending through 2025, but the Republican leader said that would not be enough.
“We have to spend less than we spent last year. That’s the starting point,” McCarthy said.
One idea is to set topline budget numbers but then add a “snap-back” provision that implements the cuts if Congress can’t make the annual appropriations process to meet the new ones. purpose.
On work requirements for aid recipients, the White House has increasingly resisted measures that would push Americans into poverty or take care of their health, said the person familiar with the talks, who spoke on condition of anonymity. to describe discussions behind closed doors.
With the Republican request to withdraw money for the Internal Revenue Service, it is still an “open issue” whether the sides will compromise by allowing the funding to be returned to other local programs, the person said.
Pressure has come down on McCarthy from the right side of the House not to send any deal, even if it means exceeding the June 1 deadline.
“Let’s hold the line,” said Rep. Chip Roy, R-Texas, is a member of the Freedom Caucus.
McCarthy said Donald Trump, the former president who is running for office again, told him, “Make sure you get a good deal.”
Failure to raise the nation’s debt ceiling, now at $31 trillion, to pay the bills America has already incurred would risk a potentially chaotic federal default. Concerned retirees and social service groups are one create default contingency plans.
Although negotiators will strike a deal in the coming days, McCarthy promised lawmakers he would abide by the rule of posting any bill within 72 hours before a vote – now likely Tuesday or even Wednesday. The Democratic-controlled Senate has promised to act quickly to send the package to Biden’s desk, before a possible deadline of next Thursday.
In a potential development, Republicans may have eased their demand to increase defense spending, instead offering to keep it at the level proposed by the Biden administration, according to a person familiar with the talks.
The teams are also looking at a proposal to boost energy transmission line development from Sen. John Hickenlooper, D-Colo., which would facilitate the construction of an interregional power grid, according to a person familiar with the draft. Those two people were also granted anonymity to discuss private negotiations.
The White House continues to argue that deficits can be reduced by ending tax breaks for wealthy households and some corporations, but McCarthy said he told the president earlier in their February meeting that raising revenue from tax increases is off the table.
While Biden has rejected, for now, which invokes the 14th Amendment to raise the debt limit itself, the Democrats in the House announced that they have all signed up to a legislative “removal” process that will force a vote on the debt ceiling. But they need five Republicans to break their party and tip the majority to go ahead with the plan.
All of them are sure to recover about $30 billion unused COVID-19 funds now that the the pandemic emergency was officially lifted.