President Joe Biden and top congressional Republican Kevin McCarthy held a phone conversation on Saturday evening, according to a person familiar with their plans, amid signs that a deal in the ongoing debt ceiling negotiations was close to being struck.
McCarthy said earlier on Saturday that he was making “progress” in negotiations on raising the federal government’s debt ceiling, as the nation faced risk of default in little more than a week.
However just ahead of the call between Biden and McCarthy, Republican negotiator Patrick McHenry told reporters “major disagreement” remained between his party and Biden’s Democrats.
“Republicans want to cut spending. That’s what we’ve offered with our approach to raising the debt ceiling, with work requirements for able bodied folks to get back in the workforce. Those things are big issues, and there’s no way to sort of gloss that over,” he said.
The Associated Press reported that work requirements for federal food aid recipients have emerged as a final sticking point in talks, even as Biden had said on Friday that a deal on raising the debt ceiling was “very close”.
Biden’s optimism came after the deadline when the US government would run short of funds to pay all its bills was pushed back to 5 June, giving both sides more breathing room but also raising the prospects that talks – which had seemed almost at a deal on Friday evening – could now stretch into next week.
On Saturday, Republican House speaker Kevin McCarthy told reporters that he was making “progress” in negotiations with Biden, saying: “We do not have a deal … We are not there yet. We did make progress, we worked well into early this morning and we’re back at it now,” according to Reuters.
When asked if Congress is able to meet the 5 June deadline, McCarthy swiftly responded: “Yes,” the Hill reports.
Biden and McCarthy have seemed to be narrowing on a two-year budget-slashing deal that would also extend the US debt limit into 2025 past the next presidential election.
Both sides have suggested one of the main holdups is a Republican effort to boost work requirements for recipients of food stamps and other federal aid programs, a longtime Republican goal that many Democrats have strenuously opposed.
The White House spokesman Andrew Bates said Republican proposals on the issue were “cruel and senseless” and said Biden and Democrats would oppose them.
But at the same time the Louisiana congressman Garret Graves, one of McCarthy’s negotiators, was blunt when asked if Republicans might relent, saying: “Hell no, not a chance.”
Bates condemned House Republicans in a statement to Politico, accusing them of “threatening to trigger an unprecedented recession and cost the American people over 8 million jobs unless they can take food out of the mouths of hungry Americans.”
Americans and the world have watched with growing fear and and anger as the negotiating brinkmanship that could throw the global economy into chaos has dragged on in yet another repeat of the regular political theater that always seems to surround the issue in Washington.
Yet Biden was upbeat as he left for the Memorial Day weekend at Camp David, declaring: “It’s very close, and I’m optimistic.”
In a blunt warning, the Treasury secretary, Janet Yellen, said on Friday that failure to act by the new date for default would “cause severe hardship to American families, harm our global leadership position and raise questions about our ability to defend our national security interests”.
Anxious retirees and others were already making contingency plans for missed checks, with the next Social Security payments due next week.
Any deal struck by the White House and Republican negotiators would need to be a political compromise, with support from both Democrats and Republicans needed to pass the divided US Congress.
McCarthy has promised to give his Republican members 72 hours to go through any deal, pushing back a vote to at least Tuesday and possibly much later in the week, depending on when a deal can be announced.
On Saturday, Axios revealed that independent senator Kyrsten Sinema has joined the negotiations, according to sources familiar with the matter.
The outlet reported that as Sinema attempts to use her newfound independent position to help negotiators reach a compromise, some Democratic lawmakers are privately concerned that her involvement might limit key renewable energy proposals.
Currently, Republicans are seeking to make modifications to the National Environmental Policy Act in order to remove legal restrictions for oil and gas companies. Meanwhile, Democrats have urged the Biden administration and Democratic congressional leaders to oppose any Nepa changes.
Earlier this month, Arizona’s representative Raúl Grijalva, a ranking member of the House natural resources committee, sent a letter – along with 79 other Democrats – to Biden and Democratic leadership, urging them to oppose environmental rollbacks in any deal.
Ultimately, focus would especially be on the reaction to rightwing Republicans in the House, especially those in the Freedom Caucus mostly aligned with former US president Donald Trump.
“Raising the debt ceiling is not a ‘concession’ by Republicans – it’s their constitutional duty,” the New York Democratic representative Dan Goldman tweeted on Friday.
“Republicans are extorting the American people by threatening to crater the economy to extract unreasonable demands they’d never be able to get in the ordinary appropriations process,” he added.
Several credit-rating agencies have said they have put the US on review for a possible downgrade, which would push up borrowing costs and undercut its standing as the backbone of the global financial system.
A similar 2011 standoff led Standard & Poor’s to downgrade its rating on US debt, hammering markets and sending the government’s borrowing costs higher.
