Speaker Kevin McCarthy left a White House meeting with President Joe Biden on Wednesday afternoon saying they had a “good conversation” but made “no agreements, no promises” in regard to the debt limit.
The California Republican reiterated his position that he wants to lift the debt limit in a “sensible, responsible” manner “but not continue this runaway spending.”
McCarthy said he and Biden left the meeting promising to continue the conversation. “I think at the end of the day we can find common ground. I really do,” he said.
A White House readout of the meeting said Biden made clear to McCarthy that lifting the debt ceiling is “not negotiable or conditional.” The president welcomes a separate discussion with congressional leaders about deficit reduction, the White House said.
McCarthy, who has been clear that Republicans want to cut spending in exchange for lifting the debt limit, said he talked to Biden about “a lot of different ideas,” but he did not reveal details publicly. However, he did hint that he’s looking for a two-year discretionary spending caps agreement, a result that’s occurred in past debt limit negotiations.
“I believe if we are able to get to an agreement, we could have a funding agreement for the next two years,” he said. “You won’t see omnibuses any more. You’ll see the Senate and the House actually do the job the American public has elected them to do, to walk through the appropriations process.”
McCarthy dismissed an option other lawmakers have floated to create a fiscal commission to propose spending overhauls. “We don’t need a commission to tell us to do our job that the American people elected us to do,” he said.
‘We just have a spending problem’
McCarthy also dismissed the idea of raising taxes or finding other revenue to offset spending instead of cutting it. Democrats have often pushed for revenue offsets in fiscal negotiations, and Biden has said his coming budget blueprint will again offer proposals to tax the country’s wealthiest individuals.
“We’ve got a lot of revenue. We just have a spending problem,” McCarthy said. “And that’s where I want to … find common ground.”
McCarthy said he was not concerned some Republicans won’t go along with his plan to demand spending cuts on the debt ceiling. “The Republicans are very united,” he said.
Biden said several times before the meeting that he planned to ask McCarthy to present a budget blueprint that would outline the spending cuts Republicans are seeking.
He is set to submit his own budget to Congress on March 9, a month after the statutory deadline. Republicans have said they’re hoping to produce their budget before the April 15 statutory deadline for Congress to complete one, which is unlikely to happen with divided government.
The Treasury Department is using so-called extraordinary measures to keep from breaching the debt limit, tools it said will last until at least June. Nonetheless, Treasury officials and bond market participants want Congress to raise the debt limit as soon as possible.
“Failing to do so is a reckless and inappropriate approach to managing fiscal policy and may jeopardize Treasury market functioning and increase costs to the taxpayer,” Treasury Borrowing Advisory Committee Chair Beth Hammack and Vice Chair Deirdre Dunn said in a Tuesday letter to Secretary Janet L. Yellen. The committee consists of representatives from major banks, insurers, hedge funds and other asset managers who advise Treasury on debt management.
House GOP meeting
House Republicans held a conference meeting Wednesday morning ahead of McCarthy’s White House visit to discuss the debt limit. The meeting served as an educational forum in which members could learn more about the budget process and float ideas for reducing spending in conjunction with lifting the borrowing cap. But no decisions were made about what specifically Republicans would ask Democrats for in negotiations.
House Ways and Means Chairman Jason Smith, R-Mo., Appropriations Chairwoman Kay Granger, R-Texas, Budget Chairman Jodey C. Arrington, R-Texas, and Financial Services Chairman Patrick T. McHenry, R-N.C., “made presentations, laid out suggestions and then answered questions,” according to Rep. Tom Cole, R-Okla.
Cole said McCarthy attended only part of the meeting. Republicans did not decide on any specific requests, other than agreeing they want to change the trajectory of rising spending.
“We’re not going to move from deficit to surplus or even balance in two years,” Cole said. “But we can certainly make a lot of progress.”
Leaders of the Republican Study Committee, the largest conservative bloc in the conference, are among those floating ideas that Republicans should put on the table.
The RSC Steering Committee endorsed a handful of broad policy proposals that could be attached to the debt limit, which RSC Chairman Kevin Hern, R-Okla., presented to the group’s members during their weekly lunch Wednesday.
The RSC’s ideas for curtailing spending include imposing statutory limits on discretionary spending; rescinding funding Democrats enacted in reconciliation laws last Congress; eliminating duplicative programs; transitioning nonentitlement mandatory spending to discretionary, giving lawmakers more say each year in how the money is spent; and establishing a long-term fiscal control that would limit debt to a percentage of gross domestic product.
The group leaders also endorsed ideas not directly related to cutting spending, like “targeted, paid-for, pro-growth tax policies” and measures to increase workforce participation, domestic energy capacity, streamline permitting and counter overregulation, as well as a debt prioritization plan. A number of Republicans have called for requiring Treasury to pay bondholders, Social Security and Medicare benefits, military salaries and veterans benefits even in the event of a debt limit breach.
Hern said he also sent a letter to Biden outlining some of the proposals, which he called “a pathway to continue to help nudge the administration” to consider economic policy changes in conjunction with the debt limit. He emphasized that Republicans do not want to create a crisis.
“There’s no member of the RSC that I’m aware of that’s said we shouldn’t pay our debts,” Hern said of his roughly 170-member caucus. “I think everybody on the Republican side wants to reflect on where we’re spending right now to see what we can do differently and pro-growth.”
Democrats have maintained that they don’t want to negotiate spending on the debt limit but would be willing to do so as part of the normal budget process. They’ve criticized Republicans for not offering specific spending cuts proposals from which they hope to negotiate.
“Speaker McCarthy showing up at the White House without a plan is like sitting down at the table without cards in your hand,” Senate Majority Leader Charles E. Schumer, D-N.Y., said in floor remarks Wednesday morning.
Senate Minority Leader Mitch McConnell, R-Ky., who has said McCarthy and Biden should take the lead on debt limit negotiations, used his own floor remarks to criticize Schumer for reversing his position from 2017, when he said the debt ceiling gave Democrats “leverage” in broader talks.
“Democrats are trying to rewrite history and pretend that Republicans’ demands for negotiations are unusual,” McConnell said Wednesday. “But that’s just false.”
McConnell and his aides have been pointing out 2017 comments in which Schumer described his intention to use debt limit and government funding deadlines to deny then-President Donald Trump money for his border wall and secure protections for “Dreamers,” undocumented immigrants brought to the U.S. as children.
“We only had one thing as leverage at that point, which was the debt ceiling,” Schumer said at the time.
David Lerman, Peter Cohn and Paul M. Krawzak contributed to this report.