© Reuters. U.S. President Joe Biden participates in a meeting of Quad leaders with Prime Minister Fumio Kishida of Japan, Prime Minister Narendra Modi of India and Prime Minister Anthony Albanese of Australia, May 20, 2023, in Hiroshima, Australia. Japan. Kenny Holston/Pool via
By Trevor Hunnicutt and Andrea Shalal
HIROSHIMA, Japan/WASHINGTON (Reuters) – U.S. President Joe Biden said on Sunday he planned to speak with Republican Congressman Kevin McCarthy on Sunday amid increasingly last-minute talks about raising the ceiling federal debt of $31.4 trillion.
Biden, traveling to Japan for the Group of Seven (G7) summit, requested the call after his negotiating team briefed him on the status of talks which broke down on Friday with no sign of progress, according to a White House official.
“We will have an opportunity to speak later today,” Biden told reporters on Sunday. When asked what message he would share with McCarthy, he declined to comment before speaking with McCarthy first.
There are less than two weeks until June 1, when the Treasury Department has warned that the federal government may be unable to pay all of its debts. This would trigger a default that could cause chaos in financial markets and drive up interest rates.
Officials did not meet on Saturday and did not announce any progress from Friday’s meetings or any plans to speak again. Instead, both sides called each other’s proposals too extreme.
White House press secretary Karine Jean-Pierre noted in a statement that Biden and McCarthy, the speaker of the House of Representatives, agreed that any budget deal should be bipartisan and accused Republicans of putting forward proposals. too far removed from the right to pass Congress. .
Late Saturday afternoon, McCarthy told reporters on Capitol Hill that he didn’t think the talks could move forward until Biden returned to the country after the G7 meeting. He accused Democrats of taking too extreme a stance on the left.
A source familiar with the negotiations said Republicans had proposed an increase in defense spending, while cutting overall spending. The source also said House Republicans want to extend tax cuts passed under then-President Donald Trump, which would add $3.5 trillion to the federal debt.
The source said the Biden administration had offered to keep discretionary non-defense spending flat for next year, which would reduce spending as adjustments are made for inflation.
Another person familiar with the talks said Republicans’ latest proposal includes “heavy” cuts over a longer period than recent budget deals, as well as a variety of measures that irritate Democrats, including work demands. for aid, food aid cuts and less money for the Internal Revenue Service which collects taxes.
The person said Republicans also rejected Democrats’ proposed measures to increase revenue, including drug payment reforms and closing “tax loopholes.”
White House officials said they expected the call between Biden and McCarthy to take place as Biden flew home on Air Force One from the Hiroshima summit.
Biden returns to Washington on Sunday after truncating his Asia trip to focus on debt limit talks. He must hold a press conference before leaving Japan.
McCarthy’s office did not immediately respond to a request for comment.
Last month, the Republican-led House passed legislation that would cut a large chunk of government spending by 8% next year. Democrats say that would force average cuts of at least 22% on programs like education and law enforcement, a figure Republicans did not dispute.
Republicans hold a narrow majority of House seats and Biden’s fellow Democrats have tight control over the Senate, so no deal can pass without bipartisan support.
U.S. Representative Patrick McHenry, a Republican negotiator, had said Republican leaders would “get together as a team and assess” where things stand.
Republicans are pushing for deep spending cuts to many national programs in return for raising the government’s self-imposed borrowing limit, which is regularly needed to cover the costs of spending and tax cuts previously approved by lawmakers.
Congressional Republicans voted three times to raise the debt ceiling, without preconditions of budget cuts, when Republican Trump was in the White House.