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Contours of debt limit deal start to take shape

Negotiators aim for deal by Monday to start process of moving it through both chambers before June 1 deadline

Senate Majority Leader Charles E. Schumer, left, and Speaker Kevin McCarthy attend the portrait unveiling for former Speaker Paul D. Ryan, R-Wis., in Statuary Hall in the Capitol on Wednesday.
Senate Majority Leader Charles E. Schumer, left, and Speaker Kevin McCarthy attend the portrait unveiling for former Speaker Paul D. Ryan, R-Wis., in Statuary Hall in the Capitol on Wednesday. (Bill Clark/CQ Roll Call)

Lawmakers from both parties suggested negotiators were making progress Thursday toward a bipartisan deal that would raise the $31.4 trillion debt limit, though days of talks still lie ahead.

Scrambling to avert a debt limit breach that Treasury Secretary Janet L. Yellen said could hit as early as June 1, negotiators are attempting to reach a framework for a deal by Sunday, when President Joe Biden returns from a trip to the G-7 summit in Japan.

Speaker Kevin McCarthy, who is negotiating with Biden through proxies, said he is hopeful that a deal could come as soon as this weekend. In a sign of progress, the two parties have begun to exchange offers, said House Rules Chairman Tom Cole, R-Okla.

“We’ve made good progress this week, but the work continues,” said Senate Majority Leader Charles E. Schumer. “ No one will get everything they want.”

If a deal is reached by Monday, the House would vote next week, with 72 hours notice after text is posted. While the Senate is scheduled to be in recess next week, Schumer said his chamber would be prepared to reconvene with 24 hours notice to schedule a vote.

The outlines for a deal were beginning to take shape, falling somewhere between the “clean” debt limit increase sought by Democrats and a House-passed GOP bill that would couple a debt limit increase with a decade of spending caps, expanded work requirements for some welfare benefits, clawing back unspent pandemic aid, and more.

Spending caps, work rules

A compromise may settle on a few years of spending caps instead of 10 years, and work requirements that stop short of touching the Medicaid program as Republicans had sought, a GOP aide said.

The length of a debt limit extension could also be longer than Republicans wanted. Their House bill called for raising the debt limit by $1.5 trillion or through next March, whichever comes first. But the aide said a compromise is more likely to extend the debt limit past next year’s elections.

It was unclear whether a GOP proposal in the House bill to streamline the permitting process for energy projects would be part of a bipartisan bill. Some lawmakers have discussed moving that measure separately.

Negotiators were said to be battling over the length of caps on discretionary spending. Republicans had modeled their decade of caps on a 2011 debt limit deal that many Democrats now consider a mistake that harmed critical programs. Democrats have been pushing for no more than two years of caps, in line with subsequent debt limit deals, while Republicans want something between two and 10.

Both sides are treading carefully in negotiations as they don’t want to give up too much and risk a majority of their party voting against whatever deal emerges.

“My impression here is that you’re going to reach a narrow agreement with some face-saving measures and no triumphalism,” said House Ways and Means ranking member Richard E. Neal, D-Mass.

McCarthy faces a tougher task than previous GOP speakers because of the growing influence of the House Republicans’ right flank — as evidenced by the January speaker’s race in which it took him 15 ballots and several concessions to get his skeptics on board.

Leaders of the ultra-conservative House Freedom Caucus who were among those McCarthy skeptics are largely withholding comment on the specifics of the debt limit negotiations but are expressing frustration over the process.

“I don’t understand much of a conversation where the Senate hasn’t passed anything. When they pass something, then I think we can have a real conversation,” House Freedom Caucus Chairman Scott Perry, R-Pa., said. “But until they do, quite honestly, I feel like we’re negotiating with ourselves.”

A few hours later the Freedom Caucus announced it has taken an official position that McCarthy and Senate Republicans should “use every leverage and tool at their disposal” to ensure the House-passed bill is signed into law, and “there should be no further discussion until the Senate passes the legislation.”

14th Amendment

Some Democratic senators from the party’s left flank are looking for an end-run around any bipartisan deal that has tough pills for them to swallow.

A group of 11 senators, led by independent Sen. Bernie Sanders of Vermont, who caucuses with the Democrats, sent a letter Thursday to Biden urging him to raise the debt limit on his own by invoking the 14th Amendment to the Constitution, which says in part that the “validity” of the U.S. debt “shall not be questioned.”

Biden has said he is considering that untested option, but that it would face court challenges and would not solve the immediate problem because time is so short.

Among the biggest partisan fights is whether to expand work requirements for recipients of benefit programs for lower-income individuals and families.

The House-passed bill would require able-bodied adults up to age 55, without dependents, to engage in work-related activities for at least 20 hours a week under Medicaid and the Supplemental Nutrition Assistance Program. That’s a first-time requirement under Medicaid, and an expansion of the current rules for SNAP beneficiaries.

“If a person is able-bodied and can work, there are 10 million [unfilled] jobs in America, only 5 million people looking, go out and attempt to get a job,” said Oklahoma Rep. Kevin Hern, chairman of the Republican Study Committee, the largest bloc of House conservatives. 

But House Minority Leader Hakeem Jeffries again called work requirements a “nonstarter.” He said any attempt to attach work requirements to Medicaid, food stamps or basic welfare, known as Temporary Assistance to Needy Families, should be discussed as part of the normal legislative process — including farm bill talks — and not in a debt limit deal.

And Biden seemed to take Medicaid work requirements off the table Wednesday, saying that while he is open to minor tweaks in current-law mandates, he wouldn’t accept any that impact medical coverage.

Nonetheless, lawmakers appeared optimistic that a vote on a deal could come as early as next week.

“Around this place, deadlines are like alarm clocks,” Cole said. “People don’t wake up until the end.”

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