Speaker Kevin McCarthy said in advance of a crucial meeting with President Joe Biden that key decisions could be made by the two parties’ chief debt limit negotiators when they meet Monday evening.
Speaking to reporters after his proxies led by GOP Reps. Garret Graves of Louisiana and Patrick T. McHenry of North Carolina met with Biden’s White House designees, McCarthy said the group had “professional, productive” talks Monday morning.
The meeting, which lasted around two and a half hours, was intended to set up the 5:30 p.m. White House discussion between Biden and McCarthy. The California Republican said he “would hope” a deal could be reached at Monday’s meeting.
“Decisions have to be made. And I think from a concept I know where I think people should be able to get to,” McCarthy said. “I understand we don’t control the Senate and we don’t control the presidency.”
McCarthy said he wants a deal as soon as Monday night in order to get the details correct and written into legislative text, provide 72 hours’ notice for members to review it before a House vote and then allow time for the Senate to clear it.
Treasury Secretary Janet L. Yellen says agency officials have determined that they can’t guarantee all federal payments can be made on time beyond June 1 without a debt limit increase or suspension. In a new letter to lawmakers on Monday, Yellen wrote that at this point Treasury’s view is a debt limit breach would be “highly likely” in early June, potentially by June 1.
“I think we could get a deal tonight, we could get a deal tomorrow, but you’ve got to get something done this week to be able to pass it and move it to the Senate,” McCarthy said. “That’s why we took action all the way back in April, even before she said it was June 1 — we thought it was in July. We don’t want to be in this last moment. I think that’s a terrible way to go.”
The two parties have been at odds over how much discretionary spending to appropriate in the upcoming fiscal year. Democrats want to increase the overall pot, including defense and nondefense accounts; Republicans want to shrink it, while still increasing defense, veterans and border security funds, which would cut other domestic and foreign aid programs more deeply.
House Republicans passed a bill in April that would cap overall fiscal 2024 spending at the level appropriated two years earlier, and then set caps for the next nine years allowing for 1 percent annual growth. Democrats are pushing for, at minimum, something close to a freeze at fiscal 2023 levels, and caps that last for no more than two years. Republicans are pushing for something between two and 10 years of caps.
“You’re 10 days out, so the president has to be serious,” McCarthy said. “We have to spend less next year than we spend this year.” He said cutting defense was “off the table” given threats posed by China and the need to keep rearming Ukraine and replacing depleted U.S. weapons stocks.
The speaker said the House would stay in session rather than depart for lawmakers’ scheduled Memorial Day recess at the end of this week if necessary. “We’re gonna stay and do our job,” he said.
McCarthy said Republicans were still pushing work requirements for able-bodied adults without dependents, another aspect of the House GOP bill that chamber passed last month. That legislation would raise the debt limit by $1.5 trillion or suspend it through next March, whichever comes first, though Democrats have pressed for a lengthier debt limit increase, beyond next year’s elections.
McCarthy repeatedly made the point that his chamber is the only one that has passed a bill to raise the debt limit. And that’s why he’s confident there won’t be any “default” on U.S. financial obligations, he said.
“I’m very confident because the House Republicans passed a bill that raised the debt limit sitting in the Senate,” he said. “If you’re on the brink, pass that and you will never have to worry about it.”
14th Amendment fallback
Another method for avoiding missed payments on Treasury debt that’s gotten a lot of attention is invoking the public debt clause of the U.S. Constitution’s 14th Amendment, which states that the “validity of the public debt of the United States, authorized by law … shall not be questioned.”
Biden over the weekend seemingly took that option off the table by saying it couldn’t be done in time to beat the June 1 deadline. But in a press call on Monday, Senate Budget Chairman Sheldon Whitehouse, D-R.I., and some legal scholars questioned that assumption, arguing that the action would be worth a brief period of litigation.
“There’s a window before the Supreme Court signs off on it where there will in fact be uncertainty. But one would hope that you could find a way … to get quickly to the Supreme Court, have them resolve the question quickly,” Whitehouse said.
“And I would say that once we’re through this and it’s clear that no speaker can ever threaten to default on the U.S. debt, can ever threaten to destroy the U.S. economy again, which would be the outcome of a determination that the debt limit statute is unconstitutional, it defangs it forever,” he added. “I think markets would rejoice.”
Lindsey McPherson and Aidan Quigley contributed to this report.
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