The White House and Republicans in Congress struggled to make meaningful progress toward a deal to raise the U.S. borrowing limit on Tuesday, leaving the economy and financial markets in a dangerous vacuum just further afield. one week before a possible payment default.
President Joe Biden and Kevin McCarthy, the Republican House Speaker, met Monday night at the White House for direct talks each called “productive”giving hope that they were getting closer to an agreement.
But staff-level negotiations that took place late Monday and Tuesday showed no sign of a breakthrough – just promises to continue the conversations.
“As long as points of disagreement remain, the President, the President and their teams will continue to discuss the way forward,” White House press secretary Karine Jean-Pierre told reporters during a briefing on Tuesday. Press.
Earlier Tuesday, McCarthy held a closed-door meeting with Republican lawmakers in the lower house of Congress in which he said he was “nowhere near” a deal with Biden.
“There are some things that divide us. . . You can’t spend more money next year than you spent this year, plain as day. We need to help people find work with work requirements,” McCarthy later told reporters.
Garret Graves, one of the Republican House members whom McCarthy named as one of the chief negotiators, then called on the White House to “empower” administration officials acting to Biden – accusing them of acting like used car salesmen saying they need to speak to their manager before refusing to negotiate on the price.
Graves told reporters on Capitol Hill that he did not expect the two sides to meet again on Tuesday.
The absence of any tangible movement towards an agreement will be increasingly alarming given that the US Treasury has warned that he might run out of money to pay all his bills by June 1. Such an event could potentially trigger massive disruptions to the financial system and affect households and businesses across the United States.
Any deal would need to be reached several days before that deadline to give both houses of Congress time to pass the legislation and send it to Biden for his signature.
The main sticking point concerns the gap in discretionary spending levels that should be set in the coming years. Although the White House has proposed a freeze on spending levels for the coming fiscal year, Republicans want spending to be cut aggressively before it starts to rise again over a longer period.
“They just now have the idea of a gel?” McCarthy said.
The two sides have also argued over adding new work requirements to social safety net programs. As the talks dragged on, Democrats grew increasingly impatient, suggesting Biden should find a way to unilaterally avoid a default on constitutional grounds, even if such a move would be legally risky.
“As I’ve said all along, McCarthy is too weak a president and his MAGA caucus too controlled by Trump to come up with a reasonable deal,” Chris Van Hollen, the Democratic senator from Maryland, wrote on Twitter. Tuesday, referencing the former president’s Make America Great Again slogan.
But McCarthy insisted a deal was still possible. “I believe we can still get there, and get there before June 1st.”
Andy Barr, a Republican from Kentucky on the House Financial Services Committee, said Biden needed to be more “serious” about the negotiations.
There was yet to be a “recognition” by the White House that putting the United States on a “more sustainable fiscal path” was necessary to protect the country’s “full faith and credit” – while “avoiding short-term default.” term” was only part of the answer, Barr added.
“That realization needs to happen pretty quickly across the aisle.”