WASHINGTON — Debt limit negotiations on Thursday morning had the feel of a deal starting to come together, with no in-person meetings scheduled but both sides working through various options in advance of the long holiday weekend.
Lawmakers made clear there were still significant differences between the White House and House GOP over spending levels and how long tight appropriations caps would be in place. But negotiators were working behind the scenes to try to bridge the gap and top Republicans sounded hopeful they could beat the June 1 deadline.
“We know where our differences lie. We worked well past midnight last night, we’re back at it today trying to get to the conclusion,” Speaker Kevin McCarthy told reporters Thursday. “We’ve already talked to the White House today, we’ll continue to work. They’re working on numbers, we’re working on numbers, and we’re working together.”
As McCarthy was leaving the Capitol shortly after 6 p.m. Eastern time, he said there was no deal yet but that he's staying in town to keep working into the weekend.
"We're worked throughout the day, and we'll continue to work to try and solve the problem, but there is no agreement," McCarthy said. Hours earlier, the House wrapped up votes for the week and members left for their districts and various Memorial Day weekend events.
White House press secretary Karine Jean-Pierre said the two sides' negotiating teams held a virtual meeting Thursday morning.
House Financial Services Chairman Patrick T. McHenry, R-N.C., one of McCarthy’s top proxies in the talks, has in his daily interactions with reporters tried to tamp down optimism that a deal was near. But on Thursday morning after emerging from a meeting in McCarthy’s office, he offered what passes for hopeful commentary.
“I’m not a pessimist at the moment,” McHenry said. “The work that we’re doing centers on a shorter and shorter range of issues.”
He repeatedly declined to give a timeline for a deal, however, and earlier in the day he was more pessimistic, saying reaching agreement by this weekend "looks very difficult."
The parties seemed to be coalescing around raising the $31.4 trillion debt ceiling to roughly $35 trillion, GOP lawmakers said, or enough to get past the 2024 elections and into the following year. That’s a much bigger raise than the $1.5 trillion House Republicans initially sought in their bill, which would put the next debt ceiling fight right in the middle of an election year.
'Idiotic' and 'un-American'
Members of the hard-line conservative House Freedom Caucus on Thursday were already up in arms over that prospect, arguing what they’ve heard so far signals McCarthy and his team haven’t extracted enough concessions from President Joe Biden.
“We’ve got to take the credit card away from the government, and it’s idiotic for him — for anybody — to consider anything (other) than what we had” in the House-passed bill, Rep. Ralph Norman, R-S.C., said. “To raise the debt ceiling without tremendous concessions is un-American and it shouldn’t happen.”
Likely gone from the final package are provisions blocking Biden’s student loan relief plan and repealing clean energy tax credits from last year’s budget reconciliation law, according to Texas Rep. Chip Roy, another Freedom Caucus member.
There seemed to be common ground brewing on the rescission of unspent pandemic aid and work requirements for some federal safety-net programs, but scaled down from work provisions House Republicans sought initially that would affect Medicaid as well as food stamps.
“If it’s true that we’re talking about another two, two and a half trillion dollars in debt increase, and if it’s true that we’re going to remove three, four, five, six of the things that we had in the (House-passed bill), someone explain to me why that’s an off-ramp that should be taken now,” Roy said. “I think it’s an exit ramp about five exits too early.”
McCarthy dismissed the criticism from his party's right flank: "I just think they need to be updated" on the negotiations, he said.
'Auto-CR', energy talks
Another idea circulating that’s won conservative backing in the past would set up an “automatic continuing resolution” mechanism in the event appropriations bills aren’t passed by Sept. 30.
The exact details of the House proposal weren’t clear, but the idea is to avert a partial government shutdown without having to scramble to pass a last-minute CR. Appropriations would kick in automatically at some preset level, perhaps the cap set by the debt limit deal.
House Judiciary Chairman Jim Jordan, R-Ohio, is involved in the “auto-CR” discussions, according to a source familiar with the talks. Punchbowl News first reported on the proposal.
The idea also has bipartisan support, including in a bill Sens. Angus King, I-Maine, and James Lankford, R-Okla., introduced earlier this year.
How the provision would incentivize lawmakers to actually finish the annual spending bills was an open question. Some conservatives have floated the idea of across-the-board cuts of 1% to 2% as part of an auto-CR; the King-Lankford bill would prevent Congress from adjourning and bar taxpayer-funded travel for lawmakers and staff until their work is done.
Energy policy was also an emerging area of some agreement, although it wasn’t clear how much could get done in time to beat the deadline. Some loosening of permitting requirements sought by Republicans might be included, as well as new rules to bolster interregional transmission of electric power, a priority of Democrats including California Rep. Scott Peters and Colorado Sen. John Hickenlooper.
Their plan would require each region to transfer a certain amount of power out of the region to help with electric grid reliability, an expanding problem as extreme weather events grow more frequent, Peters said.
“I think anyone in energy realizes it's important not just for reliability, but it's important for consumer choice because the more competition ... the cheaper energy might be,” Peters said. “And also it's important for getting clean energy from where it is — solar in Arizona — to Detroit, to where it needs to be.”
House Democrats, whose votes will be needed given likely substantial GOP defections, were caucusing Thursday to discuss the emerging package. Earlier, Minority Leader Hakeem Jeffries and other party members sought to keep up the pressure on Republicans by criticizing them for sending members home for Memorial Day.
“It’s my understanding that the designees of both President Biden as well as Speaker McCarthy will continue to talk, but it is unfortunate that House Republicans have chosen to get out of town before sundown,” Jeffries said.
Procedural hoops
Even if a deal is reached Thursday or Friday, GOP leaders have promised members 72 hours to review the text. So House passage will likely be fairly close to the June 1 deadline that Treasury Secretary Janet L. Yellen has given lawmakers, leaving virtually no time for the Senate to jump through its usual procedural hoops and get a bill to Biden’s desk in time.
Under one potential scenario, if the House can pass a bill by next Wednesday, and sends it to the Senate as a “message from the House,” Senate Majority Leader Charles E. Schumer could file cloture on it as soon as that day.
There would be no need for a motion to proceed under this format. The cloture vote would be on June 2, and then up to 30 hours of debate and a final vote on the following day. That would put Treasury into the danger zone, but no payments go out on the weekend anyway.
But House Rules Chairman Tom Cole, R-Okla., said he's unaware of a legislative vehicle in the House at the moment that could serve as a "message" — something that's passed both chambers in amended form. So the Senate early next week might still need to send over a vehicle for the House to amend, and then send back.
And then there's no guarantee that all senators will consent to shorten debate time.
“I will use every procedural tool at my disposal to impede a debt-ceiling deal that doesn’t contain substantial spending and budgetary reforms. I fear things are moving in that direction,” Sen. Mike Lee, R-Utah, tweeted Thursday. “If they do, that proposal will not face smooth sailing in the Senate.”
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(CQ Roll Call staff writers Avery Roe, Laura Weiss and David Lerman contributed to this report.)
