Speaker Kevin McCarthy said he and President Joe Biden on Monday had their best meeting yet on how to lift the statutory debt limit but that “there’s nothing agreed to” in the negotiations.
McCarthy, who was joined at the White House by two of his top aides and Rep. Patrick T. McHenry, R-N.C., said negotiators were able to better explain to one another the policies they were fighting for or against, and they all agreed on the need to quickly secure a deal. The meeting lasted just over an hour.
“I think the tone tonight was better than any other time we had discussions,” the California Republican said. “I felt it was productive … I think we were able to really focus on the areas of difference.”
The top disagreements in negotiations have been over spending caps for fiscal 2024 and beyond and work requirements for low-income benefits like the Supplemental Nutrition Assistance Program and Temporary Assistance for Needy Families.
McCarthy said those matters remain unresolved and that other issues under discussion, like overhauling permitting regulations, also have yet to be hammered out. He later told reporters at the Capitol that Rep. Garret Graves, R-La., another lead negotiator for the GOP side, is an expert on the energy infrastructure permitting issue, and that whatever doesn’t get agreed to in the debt limit package could move separately later.
“I don’t believe at the end of the day if we are able to get some permitting reform — I believe that will help the economy and grow the economy — but I don’t think it’ll solve all the permitting reform,” he said.
The speaker said he instructed McHenry and his other proxies to negotiate “through the night” with Biden’s representatives. He also said he plans to speak with the president every day until they get a deal.
“I believe we can get it done,” McCarthy said.
Biden said in brief remarks at the top of the meeting that while he was optimistic he and McCarthy could make some progress towards a deal, they still disagree on where to cut spending. He also said he wanted to include provisions to close tax “loopholes,” which Republicans have rejected.
“We got to get something we can sell to both sides,” Biden said. “We’re going to still have some disagreements, but I think we may be able to get where we have to go. We both know we have a significant responsibility.”
McCarthy said after the meeting that tax increases are not up for negotiation.
“No, we’re not looking at revenues,” he said.
McCarthy said Republicans are still pushing to cut spending below the current year’s level, without cutting defense accounts. He also said they still want to limit out-year growth to 1 percent annually, as they did with a decade of spending caps in the House-passed bill.
But he and McHenry both declined to say if they’re still pushing six years of caps as a compromise, as a White House official claimed they offered over the weekend.
“These are tough issues,” McHenry said. “A directive to cut spending year over year is the toughest thing to do in Washington, D.C. But that is the speaker’s directive to his negotiating team. It is our expectation to be able to get that.”
No wiggle room
The Monday evening White House meeting came hours after Treasury Secretary Janet L. Yellen warned lawmakers that absent congressional action, it remains “highly likely” that the government will not be able to pay all of its obligations by early June, and potentially as early as June 1.
Yellen’s warning is little changed from projections going back to early May, but it comes with just 10 days left until June 1. Congress waiting until the last minute to raise the debt limit could lead to a credit rating downgrade, and has already led to substantial increases in borrowing costs for Treasury securities maturing in early June, she said.
Despite the short timeline to produce and pass an agreement through Congress, McCarthy said negotiators are not considering a short-term debt limit suspension or increase.
“I don’t think a short-term extension benefits anybody,” he said. “If it’s a short-term extension, I think the country looks at somehow we failed, that we can’t do the job we’re supposed to do.”
When asked what the forcing mechanism for a deal would be, McCarthy replied: “I think June 1.”
McCarthy said earlier Monday that he would cancel or postpone the House’s Memorial Day recess, scheduled to begin Thursday afternoon, if needed.
“He told us to have our schedules flexible, which he’s said countless times,” Republican Study Committee Chairman Kevin Hern, R-Okla., said after leaving a Monday afternoon meeting with McCarthy and other GOP leaders.
Democrats, meanwhile, are growing furious at Republicans’ demands and intransigence on not considering tax provisions.
“Can’t have a conversation about revenue, can’t have a conversation about any policy changes that Democrats would like to have: Does that sound like a negotiation or is that a hostage-taking situation?” House Minority Leader Hakeem Jeffries, D-N.Y., told reporters. “It’s a hostage-taking situation.”
More Democrats are joining calls for Biden to consider invoking the Constitution’s 14th Amendment, which states the validity of the public debt authorized by law “shall not be questioned.”
House Appropriations ranking member Rosa DeLauro signed a Monday letter led by fellow Connecticut Democratic Rep. John B. Larson urging Biden to use the 14th Amendment as a “backstop” in case a legislative agreement cannot be reached in time.
“Further, after this immediate crisis has passed, we ask you to proactively pursue using the 14th Amendment to neutralize the continual cyclical threat to U.S. Credit and the American people that the debt limit poses,” they wrote.
Paul M. Krawzak, Aidan Quigley, Caitlin Reilly and Niels Lesniewski contributed to this report.
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