Debt limit talks halted again at Capitol as Republicans, White House face 'real differences'
WASHINGTON — Debt limit talks halted again late Friday at the U.S. Capitol shortly after resuming, another sudden turn of events after negotiations came to an abrupt standstill earlier in the day when Republican House Speaker Kevin McCarthy said it's time to "pause" negotiations, and a White House official acknowledged there are "real differences."
Top Republican negotiators for McCarthy exited the brief meeting shortly after talks restarted Friday evening. They said there were no further negotiations planned for Friday and they were uncertain on next steps.
A top White House adviser to President Joe Biden said they were hopeful for a resolution. The negotiators are racing to strike a budget deal to resolve the standoff.
"We reengaged, had a very, very candid discussion, talking about where we are, talking about where things need to be, what's reasonably acceptable," said Rep. Garret Graves, R-La., a top McCarthy ally leading the talks for his side.
Another Republican negotiator, Rep. Patrick McHenry of North Carolina, said McCarthy left for the night, and they would brief the speaker on the latest developments.
Asked if he was confident an agreement over budget issues could be reached with the White House, McHenry said, "No."
As the White House team left the nighttime session, counselor to the president Steve Ricchetti, who is leading talks for the Democrats, said he was hopeful for an outcome.
"We're going to keep working," he said.
Biden's administration is reaching for a deal with Republicans led by McCarthy as the nation careens toward a potentially catastrophic debt default if the government fails to increase the borrowing limit, now at $31 trillion, to keep paying the nation's bills.
Earlier in the day, McCarthy said resolution to the standoff is "easy," if only Biden's team would agree to some spending cuts Republicans demand.
The biggest impasse was over the fiscal 2024 top-line budget amount, according to a person briefed on the talks and granted anonymity to discuss them. Democrats staunchly oppose the steep reductions Republicans put on the table as potentially harmful to Americans.
"We've got to get movement by the White House and we don't have any movement yet," McCarthy, R-Calif., told reporters at the Capitol. "So, yeah, we've got to pause."
The White House official, who was granted anonymity to talk about the private discussions, said at that time there are "real differences" between the parties on the budget issues and further "talks will be difficult."
Wall Street turned lower as negotiations on raising the nation's debt limit came to a sudden halt, raising worries that the country could edge closer to risking a highly damaging default on U.S. government debt.
The president, who was in Japan attending the Group of Seven summit, had no immediate comment. Biden already planned to cut short the rest of his trip and he is expected to return to Washington Sunday.
Negotiators met Friday for a third day behind closed doors at the Capitol with hopes of settling on an agreement this weekend before possible House votes next week. They face a looming deadline as soon as June 1, when the Treasury Department said it will run out of cash to pay the government's incurred debt.
Republicans want to extract steep spending cuts, rolling back spending to fiscal 2022 levels and restricting future growth. Biden's team countered that the caps Republicans proposed in their House-passed bill would amount to 30% reductions in some programs if Defense and veterans are spared, according to a memo from the Office of Management and Budget.
Any deal would need the support of both Republicans and Democrats to find approval in a divided Congress and be passed into law. Negotiators are eyeing a more narrow budget cap deal of a few years, rather than the decade-long caps Republicans initially wanted, and clawing back some $30 billion of unspent COVID-19 funds.
Still up for debate are policy changes, including a framework for permitting reforms to speed the development of energy projects, as well as the Republican push to impose work requirements on government aid recipients that Biden has been open to but the House Democratic leader Hakeem Jeffries has said was a "nonstarter."
"Look, we can't be spending more money next year," McCarthy said at the Capitol. "We have to spend less than we spent the year before. It's pretty easy."
But McCarthy faces pressures from his hard-right flank to cut the strongest deal possible for Republicans, and he risks a threat to his leadership as speaker if he fails to deliver. Many House Republicans are unlikely to accept any deal with the White House.
The internal political dynamics confronting the embattled McCarthy leaves the Democrats skeptical of giving away too much to the Republicans and driving off the Democratic support they will need to pass any compromise through Congress.
Some Democrats want Biden to invoke his authority under the 14th amendment to raise the debt ceiling on his own, an idea that raises legal questions and that the president has so far said he is not inclined to consider.
Experian examined the reasons behind the decline in the number of new mortgages created and why balances are increasing.