Friday, June 21, 2024

No date-limit deal as deadline for default looms


hHouse Speaker Kevin McCarthy emerged from a one-on-one meeting with President Joe Biden on Monday without a deal to raise the debt ceiling, but expressed optimism about reaching an agreement in time to prevent a potentially catastrophic federal default.

McCarthy said after the meeting, “I thought we had a productive discussion.” “I think the tone of tonight was better than any other time we’ve had this discussion.”

McCarthy has insisted that the Republican-controlled House will not raise the debt ceiling, which refers to the maximum amount the US is authorized to borrow to meet its obligations, without spending cuts. With only a few days left to strike a deal before an impending June deadline, both sides on the GOP’s proposal to cut spending by imposing tougher working requirements for federal aid programs and putting a cap on future spending There are differences.

But the contours of a possible deal are slowly taking shape. According to people familiar with the talks, the two sides have discussed a framework for a settlement that would return $30 billion in unused COVID-19 relief funds, allow for reforms to energy development and spending through the end of 2024. Will put on a cap.

Time is running out for Congress and the White House to strike a deal before the US Treasury runs out of cash to pay the government’s bills, which could lead to an unprecedented default. Treasury Secretary Janet Yellen reiterated on Monday that the money was projected to run out in early June and probably by June 1. Under legislative rules, lawmakers in the House have 72 hours to read the bill after the text is released.

Read more: What to know about credit limit history.


Like McCarthy, Biden described the meeting as “productive” in a statement, but noted that “areas of disagreement” remained. Monday’s one-on-one meeting marked the third Oval Office discussion between the two leaders on the debt ceiling. The talks resumed just a day after Biden returned from a Group of Seven summit in Japan as pressure intensified.

The sticking points remain. McCarthy has insisted that government spending in the coming fiscal year must be lower than last year’s, drawing pushback from Democrats, who want flat spending through the 2023 fiscal year. Patrick McHenry of North Carolina, a prominent McCarthy ally who attended the meeting, told reporters that resolving the issue would not be easy.

McHenry, who serves as chairman of the House Financial Services Committee, said, “Directing spending cuts year after year is one of the most difficult things in Washington, but it’s the speaker’s instructions to his negotiating team.”

Another major issue in discussion is the Republican proposal on work requirements for Medicaid, which the Biden administration has said would result in millions of people losing coverage. The GOP has introduced new cuts to food aid by making it harder for states to waive work requirements in places with high unemployment. The Congressional Budget Office predicted last month that if the GOP bill became law and tougher work requirements were implemented, about 600,000 Americans would lose health insurance and about 275,000 Americans would lose access to food stamps per month.

Read more: Can Joe Biden Use the 14th Amendment to Solve the Debt Ceiling?

McCarthy has previously said that work requirements for public assistance programs are non-negotiable in debt ceiling negotiations. On Sunday, Biden said House Republicans are taking an “excessive position” and called the GOP’s current proposal “unacceptable.” But McCarthy has so far stuck to calls for sharper spending cuts with caps on future spending, rejecting options laid out by the White House that seek to reduce the deficit with new revenue from tax increases for wealthy Americans. has been invoked.

“I think we should look at tax loopholes and make sure the wealthy pay their fair share,” Biden said in the Oval Office before the meeting. “I think revenue matters, as long as you’re not taxing someone under $400,000.”

McCarthy said his staff would continue to consult with Biden, although the two leaders are likely to “talk every day” until the debt ceiling is resolved.

Must read more from time to time

write to Nick Popli at [email protected].