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Party leaders optimistic as debt limit negotiators get to work

President leaves door open to tighter work requirements for federal benefits, but faces pushback from his own party

Speaker Kevin McCarthy, R-Calif., conducts a news conference with House and Senate Republicans on the west terrace of the Capitol on Wednesday.
Speaker Kevin McCarthy, R-Calif., conducts a news conference with House and Senate Republicans on the west terrace of the Capitol on Wednesday. (Tom Williams/CQ Roll Call)

Negotiators tapped by President Joe Biden and Speaker Kevin McCarthy to hash out a debt limit compromise were racing against the clock Wednesday to get some principles down on paper that could be written into legislative text in time for votes as early as next week.

Both the president and his chief GOP counterpart on Capitol Hill said they thought a deal was possible. Biden is scheduled to return Sunday from his trip to Japan for the G-7 summit, telling reporters at the White House on Wednesday he’d be back for “final negotiations” and that he’d hold a press conference upon his return.

“I’m confident that we will get the agreement on the budget, that America will not default,” Biden said. “Every leader in the room understands the consequences if we fail to pay our bills.”

Steve Ricchetti, counselor to the president, and Office of Management and Budget Director Shalanda Young are negotiating on the president’s behalf, while Rep. Garret Graves, R-La., and McCarthy aides are representing the speaker.

[Related: Debt limit talks pared down to proxies for Biden, McCarthy]

McCarthy said Wednesday a deal by Sunday was “doable,” but still slammed Biden for traveling during the negotiations.

“It’s doable, but this is for a guy who didn’t want to meet with us for 97 days and leaves the country and says he wants to come back Sunday to have a press conference?” McCarthy said after his own press conference with House and Senate Republicans.

Biden continued to insist the negotiations are not about raising the debt limit, saying instead the talks are on the annual budget. McCarthy dismissed the idea of doing separate bills for the debt limit and whatever emerges from the ongoing talks.

“We don’t have time to play those political games anymore,” McCarthy said.

McCarthy said the House should move first on a bill after a deal is reached, and that he would ensure members have 72 hours to read the bill before voting as the chamber’s rules require.

The Senate is scheduled to be in recess next week, and the House is set to be out of town the week after. Lawmakers are signaling they could adjust those plans to ensure they pass a bill reflecting a potential deal before June 1, when Treasury Secretary Janet L. Yellen says the government is in danger of running out of cash and borrowing room.

“We must work to take default off the table, and a bipartisan bill in each chamber that can get enough votes to pass in each chamber is the best solution for averting default,” Senate Majority Leader Charles E. Schumer said Wednesday. “Bipartisanship is needed. It’s the only way to go.”

Even under a very ambitious timeline where a deal is reached this weekend and legislative text posted late Sunday, the earliest the House could vote would be Wednesday under the 72-hour rule. The Senate would then be faced with a choice of returning from recess early to vote before Memorial Day weekend or wait until it’s getting dangerously close to June 1 to act.

Work requirements, spending levels

McCarthy has described tightening work requirements for programs like the Supplemental Nutrition Assistance Program, formerly known as food stamps, as a “red line” for him in negotiations. Those provisions were a key selling point for House conservatives in the House GOP debt limit bill that chamber narrowly passed last month.

The most far-reaching piece of the House bill’s work requirements would cut Medicaid funding for states where able-bodied adults aged 19 to 55, without dependents, don’t engage in work-related activities for at least 20 hours a week, for at least three months out of the year. That’s a major change from current law for Medicaid, the joint federal-state health program for low-income individuals.

Biden clearly appears to have ruled out that provision, which the Congressional Budget Office estimates would cut federal Medicaid funding by $109 billion over a decade. “I’m not going to accept any work requirements that’s going to impact on medical health needs of people,” he said Wednesday.

But he didn’t rule out other changes Republicans have proposed that would expand on current law. “I voted years ago for the work requirements that exist,” Biden said. “It’s possible there could be a few others, but not anything of consequence.”

McCarthy pushed back on Biden’s reluctance to accept bigger changes. “What he’s saying is he would rather borrow money from China to pay able-bodied people with no dependents not to work instead of helping them get a job? I think that’s wrong,” he said.

In addition to new Medicaid rules, the House bill would expand the existing 20-hours-per-week work requirement under SNAP to cover able-bodied adults without dependents up to age 55. The exemption from that rule currently stops at age 49. That would cut food stamp funding by $11 billion, the CBO said.

Another SNAP provision, which would prevent states from carrying over unused work requirement exemptions for more than a year, would cut spending by less than $500,000. And a separate provision that would set tighter work rules for cash assistance under the Temporary Assistance for Needy Families program would save just $6 million over a decade.

Given the relatively small budgetary impact, it was possible that the smaller work requirement provisions could be grounds for a potential compromise. But groups like the left-leaning Center on Budget and Policy Priorities have come out swinging against the TANF language, and the Congressional Black Caucus issued a statement Wednesday opposing all of the safety-net provisions as “cruel and ill-advised.”

The two sides are also not seeing eye-to-eye on spending levels, with Republicans pushing to limit appropriations to the fiscal 2022 topline, a $131 billion cut from the current spending level established in the December omnibus package.

“Every moment I spent with the president, he doesn’t want to go there,” McCarthy said. “He does not want to go back one dollar.”

Republicans are pushing for spending caps of up to 10 years, while Democrats are urging a much shorter cap on spending.

Discharge petition

Despite some public optimism about the negotiations, Democratic leaders are worried enough about not getting to a deal that they decided to proceed with a discharge petition in the House that could force floor action if 218 members sign it.

“Given the impending June 1 deadline and urgency of the moment, it is important that all legislative options be pursued in the event that no agreement is reached,” House Democratic leader Hakeem Jeffries said in a letter to colleagues Wednesday morning.

House Budget ranking member Brendan F. Boyle, D-Pa., filed the discharge petition Wednesday on a special rule that would allow for expedited consideration of a debt limit bill.

Democratic leaders are urging all 213 of their members to sign the discharge petition, but they would still need five Republicans to join them to get the 218 needed to force a floor vote.

Republican leaders are confident their members won’t sign it.

“The votes they need are actually McCarthy’s strongest supporters in the conference,” House Rules Chairman Tom Cole, R-Okla., said. “These are the people that stuck with him for 15 speaker votes.”

Even if Democrats got 218 signatures, the earliest a bill could go the House floor would likely be the week of June 5, or after Treasury’s deadline. And Senate passage, even if that chamber could amass 60 votes to get past a filibuster, could take another week.

Some Senate Democrats, meanwhile, were trying to convince Biden to simply ignore the debt ceiling under an interpretation of the Constitution’s 14th Amendment that has divided legal scholars.

“We are worried that the Republican hostage takers are willing to throw the economy over a cliff, take out millions of jobs and distort our good name around the world,” Sen. Elizabeth Warren, D-Mass., told reporters.

David Lerman and Laura Weiss contributed to this report.

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