White House and congressional negotiators are reportedly nearing a budget deal that would cut spending and raise the debt ceiling to avert an unprecedented default on U.S. debt — and members of both the Republican and Democratic parties are fuming and fretting about it, even as difficult issues remain unresolved.
President Joe Biden said Thursday afternoon that the negotiators were “making progress” and he believed that a bipartisan agreement will be reached. But he said that the two sides have very different visions for the country. “Speaker McCarthy and I have a very different view of who should bear the burden of additional efforts to get our fiscal house in order,” Biden said. “I don't believe the whole burden should fall on the backs of middle-class and working-class Americans. My House Republican friends disagree.”
The deal could be sealed as early as tomorrow, Republican Rep. Mike McCaul of Texas told CNN Thursday morning. And Republican Rep. Kevin Hern of Oklahoma told Reuters that negotiators “are inching closer to a deal” and an agreement is likely by Friday afternoon.
House Speaker Kevin McCarthy and his negotiators also indicated that the talks were advancing but remain at a delicate stage. “Are we closer? Yes,” Republican Rep. Patrick McHenry of North Carolina said. “Is it more difficult? Yes.”
McHenry said nothing had been finalized yet and that talks are entering the most difficult phase. “Nothing’s done, and we’re at a sensitive phase with sensitive issues that remain. Those sensitive issues are the thorniest issues that we’ve been discussing,” he told reporters.
The emerging deal reportedly would extend the debt limit through 2024 and include a strong incentive for Congress to pass all 12 annual spending bills: a mechanism that would automatically extend federal funding at a capped level agreed upon by the two sides if the appropriations bills aren’t enacted by the end of the fiscal year. The deal reportedly also would claw back unspent Covid funding and could still include some of the stiffer work requirements sought by Republicans for certain safety net programs.
The deal could include some surprises. Defense spending remains a sticking point in the talks, with Republicans looking to exempt the military from any spending caps and instead make deeper cuts to non-defense programs like education, Jim Tankersley of The New York Times reports. But the Associated Press says that Republicans may be willing to pull back on their demands for defense spending — and could be eyeing at least a modest victory on one of their biggest priorities, IRS funding.
“Republicans may be easing their demand to boost defense spending, instead offering to keep it at levels the Biden administration proposed, according to one person familiar with the talks and granted anonymity to discuss them,” the AP reported. “The Republicans may achieve their goal of rolling back bolstered funding for the Internal Revenue Service if they agree to instead allow the White House to push that money into other domestic accounts, the person said.”
“In case anyone had doubts about Republicans’ priorities, at the 11th hour before a catastrophic default, they’re making a last ditch effort to help rich people cheat on their taxes,” Democratic Sen. Ron Wyden of Oregon tweeted in response to that report.
The Washington Post adds that Biden officials may see the tradeoff as a good way to preserve funding for programs like nutrition assistance, rental aid and scientific research without giving up too much: “It is unclear exactly how much money the final agreement might strip from the IRS, but one of the people familiar with the matter said it is unlikely to be more than $10 billion.”
As indications grew that a deal may be within reach, some conservatives and progressives expressed heightened concerns that their leaders will give up too much to get to a final agreement.
What Republicans are angry about: “As the deadline nears, it’s clear the Republican speaker — who leads a Trump-aligned party whose hard-right flank lifted him to power — is now staring down a potential crisis,” the AP said.
Conservatives were angered by the likelihood of a larger increase in the debt ceiling than House Republicans had included in the bill they passed last month, which would lift the limit by $1.5 trillion or until March 31, 2024, whichever comes first.
“I am concerned about rumors to the effect — and I haven’t read or seen anything yet — but rumors that we may have some sort of a deal in place that would raise the debt limit for more than what was called for in Limit, Save, Grow for a whole lot less in return,” said Rep. Bob Good of Virginia. “If that were true, that would absolutely collapse the Republican majority for this debt ceiling increase.”
Members of the House Freedom Caucus sent McCarthy a letter Thursday calling a larger debt-limit hike “outrageous” and Biden’s position “preposterous.” The conservatives urged McCarthy to add border provisions to the Republican bill and end funding for the FBI’s new headquarters. The letter also questioned the validity of the June 1 deadline provided by Treasury Secretary Janet Yellen and suggested that McCarthy offer a stopgap measure to extend the deadline by clawing back unspent Covid money and repealing funding for the IRS enacted by Democrats last year.
On the Senate side, Utah Republican Mike Lee threatened to derail quick passage of any deal, tweeting: “I will use every procedural tool at my disposal to impede a debt-ceiling deal that doesn’t contain substantial spending and budgetary reforms. I fear things are moving in that direction. If they do, that proposal will not face smooth sailing in the Senate.”
McCarthy acknowledged the anxieties. “I don’t think everybody is going to be happy at the end of the day,” he told reporters. “That’s not how this system works.”
What Democrats are angry about: Many progressives are worried that the administration will agree to spending cuts they see as too steep — and they worry that the administration, and Biden specifically, has been too restrained in fighting back against the GOP’s demands and public posturing.
“The scale of the cuts is staggering, which really the public knows very little about,” said Rep. Rosa DeLauro of Connecticut, the top Democratic appropriator, per Politico. “The president should be out there.”
Dozens of Democratic votes may be needed to pass any deal, and some in the party feel they have not gotten concessions to match their role. “Many rank-and-file Democrats feel as if they’re going to be asked to vote for a package that is slanted toward Republican demands with little for them in return,” Punchbowl News reported Thursday morning, adding that Biden and Democratic leaders will have a lot of work to do to round up the necessary votes. “This will be a big test for House Minority Leader Hakeem Jeffries and Minority Whip Katherine Clark. They’ll have to deliver dozens of Democratic votes for Biden on a deal that benefits the president’s reelection campaign perhaps more than anyone else,” Punchbowl’s Jake Sherman and John Bresnahan suggested.
What’s next: Maybe, just maybe, we’ll see a deal tomorrow. The talks continue, but with just a week to go before the June 1 deadline — the earliest the government might run out of cash to pay its bills — and no agreement in place just yet, the House has left town for its Memorial Day recess. McCarthy has promised to allow 72 hours for members to read any legislation, and lawmakers can be called back with 24 hours’ notice.