Debt ceiling deal possible by weekend: McCarthy

Negotiators from the White House are working Thursday in the US debt limit with House Speaker Kevin McCarthy’s emissaries at the Capitol, leading talks trying to strike a budget deal to avoid a impending economic crisis.

With hope for a success when this weekend, President Joe Biden and McCarthy tapped their top representatives to make a deal after talks with a larger contingent stalled.

Upbeat, McCarthy said it was important to have an “agreement in principle” by the end of the week if they hoped to reach a vote in the House next week. That would leave enough time for the Senate to act, too, before a June 1 deadline.

“Everybody is working hard,” McCarthy told CNN and others at the Capitol.

The White House team also appeared happy when they entered the building, but declined to comment and left two hours later. They are expected to return to it on Friday and over the weekend.

“This doesn’t have to be a crisis,” Vice President Kamala Harris said in a virtual meeting with community leaders on Thursday.

“A default could trigger a recession, freeze military paychecks and raise interest rates for years to come,” Harris said. “America needs to pay our bills, just like you and your family and other hardworking Americans do every day.”

All sides are racing to strike a deal on budget cuts that Democrats and Republicans can live with, the price to pay as McCarthy’s newly empowered House Republicans try to get the spending cuts. Those cuts could be in exchange for GOP votes to raise the debt limit, which is now $31 trillion, and keep paying the nation’s bills.

Biden and McCarthy have mostly cooled what has been heated rhetoric over Republican demands. The president said he will review the talks because he will be out of the country for the next few days. Group of Seven summit in Japan. Biden cut the rest of the his trip to Papua New Guinea and Australia so that he can return to Washington early.

“I’m confident we’ll get a budget deal and America won’t default,” Biden said said Wednesday before he left.

Behind closed doors is the key personnel who can cut a sweeping budget deal. Steve Ricchetti, Biden’s longtime aide who is now the president’s adviser, along with Office of Management and Budget Director Shalanda Young and director of legislative affairs Louisa Terrell represented the administration. McCarthy himself said he planned to stop at some of the talks, and tasked Rep. Garret Graves, R-La., who is a close ally, for Republicans. Another Republican, Rep. Patrick McHenry of North Carolina, the chairman of the Financial Services team, just joined on Thursday.

A White House official said Bruce Reed, the deputy chief of staff, was traveling with the president to contact and brief Biden.

“We still have a lot of work to do,” McHenry said after Thursday’s session.

At stake is federal spending over the next few years as Republicans use the debt ceiling vote, a routine exercise usually done in a bipartisan fashion to increase borrowing capacity and pay the bills. of the country, as a means of pushing their budgeting priorities.

The contours of a deal that includes some cuts, recovery of unused COVID-19 money and a framework to discuss new permitting rules to more quickly develop energy projects formed, but the details remain murky.

McCarthy’s Republicans want to restore spending to fiscal 2022 levels and cap annual increases at just 1% over the next decade — saving the Defense and Veterans accounts — in what Democrats say would be a devastating cuts that are inflicting hardship on many Americans.

Republicans know their proposal will only make a dent in the nation’s growing debt load, but they argue spending cuts have to start somewhere to address what they say is an unsustainable annual deficit. deficiencies.

Democrats have resisted, and negotiators are looking at budget caps for the next few years as an alternative to limits that would last a decade.

Notably absent from the negotiating room are the congressional appropriators — the House and Senate chairwomen who run the Appropriations Committees, which actually set the spending plans. It is clear that Democratic appropriators and perhaps even some Republicans will almost certainly balk at the level of cuts being considered.

Reflecting the pressure McCarthy faces from his right wing, the conservative House Freedom Caucus said in a statement there would be “no further discussion” until the Senate approves the Republican bill passed by the House.

With a Democratic-controlled Senate, that’s unlikely. And Biden has already said he will veto it.

One area where all sides seem more likely to agree is the Republican proposal to restore about $30 billion in unspent COVID-19 funding now that the federal government has declared an official end to the emergency. pandemic.

Republicans also want to include their policy priorities in any deal, and that will be a tougher sell.

House Democratic Leader Hakeem Jeffries said Thursday that the Republican proposal for tougher work requirements on government assistance recipients is a “nonstarter. Period. Full stop.”

Jeffries noted that many House Republicans themselves, including McCarthy, voted against enhanced work requirements for food stamp recipients in the Supplemental Nutrition Assistance Program just a few years ago.

“It’s a hostage taking,” Jeffries said. “They’re trying to get the notes to ransom to avoid default.”

But Biden has opened the door to some additional job requirements for non-health care programs. such as Medicaidand discussions about food stamps and cash assistance programs continue.

In the amendments up for approval, Republicans are eager to repeal the National Environmental Policy Act, known as NEPA, to allow energy projects to be approved and developed more quickly, without years of delays from in challenges and cases.

Biden’s own climate adviser John Podesta met this week with some House Democrats as the administration, too, seeks changes that would more quickly roll out clean energy projects and upgrade the transmission lines to combat climate change.

But the two sides remain far apart on the size and scope of the reforms, with some prominent lawmakers, including Sen. Joe Manchin, DW.Va., has their own suggestions. It is unclear whether negotiators will be able to reach a final agreement on the authorization provisions or simply arrive at a framework that could lead to future discussions between the White House and Congress.

Time is short before the June 1 deadline to raise the debt limit and avoid what economists warn would be a devastating default, the first of its kind, that would destroy the economy.

McCarthy has vowed to follow House rules that require 72 hours notice before voting on any bill, meaning a deal is needed this weekend if the House wants to vote before it leaves. at the end of next week for the Memorial Day recess.

Senate Majority Leader Chuck Schumer told senators on Thursday, as they prepared to leave for their own weeklong recess, saying they should be ready to return with 24 hours’ notice to vote, if necessary. Most likely, the Senate is expected to begin voting when it returns after Memorial Day.

Democrats in the House and Senate are engaging in other strategies, including trying to force a vote to raise the debt limit without the spending cuts demanded by Republicans. Progressives also pushed Biden to make a plea 14th amendment to raise the debt ceiling, something the president has signaled he doesn’t want to do yet.


Associated Press writers Kevin Freking, Chris Megerian, Stephen Groves and Mary Clare Jalonick in Washington and White House Correspondent Zeke Miller in Hiroshima contributed to this report.

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