With a potential U.S. debt default just over a week away, House Speaker Kevin McCarthy said late Wednesday that negotiators were making progress toward a deal to raise the federal borrowing limit. But negotiators have offered little indication that they are nearing a deal.
“I think things are going a little better,” he told Fox Business after staff-level talks had concluded at the White House for the day, adding that spending levels remain a stumbling block.
McCarthy earlier told reporters that the two sides remain far apart and that fundamental differences over federal spending remained unresolved, even after days of direct negotiations.
The Republican leader has continued to insist that spending levels must come down. “You have to spend less than you spent last year,” he said. “That is not that difficult to do. But in Washington, somehow that is a problem.”
Biden said early this week that House Republicans would need to move off their “extreme positions” for there to be progress in talks over raising the nation’s debt limit. “It’s time for Republicans to accept that there is no bipartisan deal to be made solely, solely, on their partisan terms,” Biden said at a news conference following the G7 Summit in Japan.
McCarthy and his fellow Republicans appear to disagree, publicly refusing to budge on any of their demands. Biden has reportedly offered to freeze spending at 2023 levels, cap spending for two years and rescind unspent Covid funds. Republicans have insisted that spending must be cut in any deal to raise the debt limit. And they have repeatedly sought to pressure Biden to accept most of their demands without offering any concessions beyond a debt-ceiling hike.
When McCarthy was asked Tuesday what concessions he’s making his response was telling: “We’re going to raise the debt ceiling.” Republican Reps. Patrick McHenry of North Carolina and Garret Graves of Louisiana, two of McCarthy’s negotiators, also said Tuesday that the GOP concession was raising the debt limit.
White House spokeswoman Karine Jean-Pierre said Wednesday that avoiding default should not count as a concession: “We’ve also heard some House Republicans refer to preventing default as the only concession they are willing to make. But preventing a catastrophic default is not a concession. It’s their job. Period.”
McCarthy’s stance also reflects the continued pressure he faces from his members, any one of whom can call for his ouster. The House Freedom Caucus has urged Republican leaders to hold fast in negotiations and push for everything in the GOP bill. “It's time for President Biden and Senate Democrats to do theirs and pass the Limit, Save, Grow Act,” the group tweeted last week. “No more discussion on watering it down. Period.”
And Rep. Chip Roy, a member of the Freedom Caucus, on Wednesday warned Republicans against making concessions in a four-page memo laying out conservative talking points. Roy wrote that the GOP agenda items are all critical “and none should be abandoned solely for the quest of a ‘deal.’”
Democrats worry they’re losing the PR battle: It’s no mystery why Republicans keep hammering the same points and pressing for their priorities. They are clearly feeling their oats, confident that they have the upper hand and can both set the media narrative and dictate the terms of the talks.
McHenry has told reporters that the White House made a strategic mistake by not negotiating earlier.
“McCarthy is speaking to reporters a half-dozen times per day. Graves and McHenry are accessible. The White House negotiators haven’t spoken once to reporters outside the daily briefing,” Punchbowl News noted this morning.
Some Democrats are reportedly frustrated by the White House’s messaging on the talks, or lack of it.
For its part, the White House on Wednesday argued again that this is a “manufactured crisis” and pointed to comments by Republican Rep. Matt Gaetz of Florida as proof of the GOP’s culpability.
“I think my conservative colleagues for the most part support Limit, Save, Grow, and they don’t feel like we should negotiate with our hostage,” Gaetz told Semafor on Tuesday, referring to the legislation passed by the House.
The White House used that remark to accuse House Republican leaders of kowtowing to their far-right members. “They’re saying the quiet thing out loud, referring to the full faith and credit of the United States as a ‘hostage,’” Jean-Pierre said.
Pramila Jayapal, chair of the 102-member Congressional Progressive Caucus, lashed out at Republicans Wednesday at a Capitol Hill news conference. Jayapal argued that only McCarthy would be to blame if the country defaults. She suggested, as Biden and other Democrats have as well, that some in the GOP expect to gain politically from tanking the economy.
“Today the United States is closer to default than we have ever been in our history for one reason and one reason only: that is, extreme Republican recklessness that will crash our economy,” she said. “And let me be clear: Republicans have no interest in cutting the deficit. They are willing to crash the economy because they want to continue their extreme tax cuts for the wealthiest corporations and billionaires across the country. And guess what? They want you, working people, to finance those tax cuts for the wealthiest.”
Jayapal said the White House had told her that Republicans rejected policy proposals that would have cut the deficit by $3 trillion, including ending $31 billion in tax subsidies to big oil and closing tax loopholes to raise more than $60 billion. Jayapal said the GOP also shot down other tax proposals and rejected raising the number of prescription drugs subject to Medicare price negotiations, which the administration says would save $200 billion.
“There is going to be a moment here, and it’s coming very, very soon, where they will have to make a choice between their constituents and their country and an extreme MAGA Republican hostage-taking that their speaker is leading them into,” Jayapal said of Republicans.
She argued that it would only take a handful of Republicans signing on to Democrats’ discharge petition to force a floor vote on a debt-limit increase. House Democrats announced Wednesday that all 213 of their members had signed.
A big fight over a relatively small part of the budget: Jim Tankersley of The New York Times notes that the fight has centered on non-defense discretionary spending, which accounts for less than 15% of the $6.3 trillion that the federal government is expected to spend this year. “It is not outsized, by historical standards. It is already projected to shrink, as a share of the economy, over the next decade,” Tankersley writes. “And it has nothing to do with the big drivers of projected spending growth in the coming years: the safety-net programs Social Security and Medicare, which are facing increasingly large payouts as the American population ages.”
The fight, in other words, is “almost certain not to produce any agreement with Mr. Biden that would dramatically alter the course of federal spending in the next decade,” Tankersley says.
What’s next: The House will recess after its votes on Thursday, House Majority Leader Steve Scalise said, and members will get 24 hours’ notice to return if a debt ceiling deal is reached over the weekend or next week.
