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Wide gulf between debt limit negotiators as time grows short

Some in GOP question how hard a deadline June 1 is

Reps. Garret Graves, R-La., left, and Patrick T. McHenry, R-N.C., speak to reporters about debt ceiling negotiations as they leave the House Republicans’ conference meeting at the Capitol Hill Club in Washington on Tuesday, May 23, 2023.
Reps. Garret Graves, R-La., left, and Patrick T. McHenry, R-N.C., speak to reporters about debt ceiling negotiations as they leave the House Republicans’ conference meeting at the Capitol Hill Club in Washington on Tuesday, May 23, 2023. (Bill Clark/CQ Roll Call)

With just nine days left before the government may not be able to pay all its bills, GOP negotiators said zero progress is being made and that their White House counterparts lack the “urgency” needed to cut a deal.

The White House negotiators have been more quiet but congressional Democrats briefed on the talks said Republicans haven’t dropped enough of their “extreme” demands to attract bipartisan support.

The precarious nature of negotiations has lawmakers on both sides of the aisle worried about their ability to lift the debt limit before June 1, when the Treasury Department expects it may run out of cash and accounting maneuvers to pay all debt obligations. However, some Republicans have begun questioning how solid that June 1 deadline is.

North Carolina Rep. Patrick T. McHenry, one of the Republicans participating in talks on behalf of Speaker Kevin McCarthy, said negotiators have yet to agree to anything and are not any closer to a deal after their late-night talks on Monday.

“It’s a slow walk,” he said Tuesday morning. “There’s a lack of urgency that is problematic, deeply problematic.”

McHenry said although he felt the Monday evening meeting at the White House between McCarthy, Biden and their proxies was “productive,” the fundamental issue is that the White House has not accepted the key GOP demand that spending be cut from the current fiscal year’s level.

“The White House still has this expectation that they can spend more money next year,” he said.

Both sides remain open to rescinding unspent pandemic funding and overhauling energy and infrastructure permitting rules but have yet to officially agree to anything. And Republicans are continuing to press for expanded work requirements on low-income benefit programs, while Democrats try to keep those out of the talks.

“Everything else can come into zone,” McHenry said. “But if you don’t get the spending question right, then that is fundamentally at odds with what House Republicans passed.”

Rep. Garret Graves, another McCarthy proxy, said negotiations won’t be productive until Democrats agree to cut spending.

“They’re continuing to try and continue the same trajectory of overspending, overtaxing and forcing the next generation a debt that absolutely they cannot afford and certainly didn’t pay in,” the Louisiana Republican said.

Despite their pessimism early Tuesday, McHenry and Graves and McCarthy’s top aides spent a few hours negotiating with the White House representatives in the speaker’s conference room. Graves said afterwards that spending levels remained the key sticking point and he wasn’t sure when negotiators would meet next.

“We’re trying to make progress,” McCarthy said midday Tuesday. But he noted Democrats still “want to spend billions of more dollars than they’ve spent this year, which is not going to happen.”

McCarthy also accused the president of making last-minute requests to add prescription drug and tax provisions.

“To me, that’s a tactic to try to blow up negotiations,” he said.

‘Untenable’

House Democrats say Republicans’ demands on spending cuts go too far, especially since they want to protect defense accounts and solely cut nondefense programs.

“The speaker insists that there won’t be draconian cuts and yet continues to say that spending levels must go down,” House Democratic Caucus Chairman Pete Aguilar said. “His position is simply untenable. Based on what Republicans have shown us with their appropriations bills, we are looking at a 30 percent cut across the board to the remaining domestic programs.”

Aguilar, D-Calif., said Democrats are not willing to cut spending by $131 billion to go back to fiscal 2022 levels but are open to “holding the line” at the fiscal 2023 level.

“That is a completely reasonable position in exchange for a two-year increase in the debt limit,” he said.

Democratic Leader Hakeem Jeffries provided his caucus with a “pretty detailed” synopsis of where negotiations stand during a Tuesday morning meeting, according to Ways and Means ranking member Richard E. Neal, D-Mass.

Jeffries said Republicans are still pushing for a decade of spending caps, Neal said. “Who knows what’s going to happen in the next 10 years?” he said, noting the possibility of another pandemic or 9/11-type event.

Democrats have launched a discharge petition on a special rule that could force action on a debt limit measure against GOP leaders’ wishes. Aguilar said they welcome Republicans who are “serious about avoiding default” to come talk to them, as he suggested Democrats aren’t wed to using the petition to force a vote on a “clean” debt limit bill.

“We’re happy to work through solutions that can get to 218 votes,” Aguilar said.

The petition needs 218 signatures but currently has 211, after Alaska’s Mary Peltola signed it on Tuesday. All but two Democrats — Reps. Ed Case of Hawaii and Jared Golden of Maine — have signed it.

‘Hedging’ on deadline?

Treasury Secretary Janet L. Yellen wrote to congressional leaders Monday to warn that it was “highly likely” the government would not be able to pay all of its obligations in early June and potentially as soon as June 1.

Some Republicans are reading flexibility on the June 1 deadline.

“It looks like they’re hedging now and opening up the door to move that date back,” House Majority Leader Steve Scalise, R-La., said.

Rep. Ralph Norman, R-S.C., said he sees June 1 as a “false” deadline.

“I do think Yellen will say that we do have money coming in,” he said. “She will extend it, but right now she’s using June 1.”

The Bipartisan Policy Center on Tuesday updated its projection of the “x date,” saying it now expects the government to stop being able to pay some bills between June 2 and June 13.

The Senate is currently on recess, scheduled to return May 30. Senate Minority Leader Mitch McConnell, R-Ky., said during an unrelated event in his state Tuesday that “the country will not default” and tried to ease anxiety about the negotiations.

“Look, I think everybody needs to relax,” he said. “The last 10 times we’ve raised the debt ceiling there were things attached to it. This is not that unusual and is almost entirely required when you have divided government. Regardless of what may be said about the talks on a day-to-day basis, the president and the speaker will reach an agreement.”

The House is scheduled to be on recess starting Thursday afternoon until June 5. GOP leaders told their members during the conference’s weekly meeting Tuesday morning that they will be able to go back to their districts after votes this week so long as they’re prepared to return to Washington with 24 hours’ notice, according to Republican Study Committee Chairman Kevin Hern.

“The negotiations are with the speaker and his team and the White House and their team and so the rest of us being here, just waiting around, doesn’t do any good for anyone,” the Oklahoma Republican said.

Fellow Oklahoma GOP Rep. Tom Cole said leadership’s message in the conference meeting was to “hold fast.”

“Our strength is just hanging together and pointing out over and over the Senate doesn’t have a bill, we don’t have a written position from the president,” he said. “So right now our bill is still the only game in town.”

Avery Roe, Laura Weiss, Aidan Quigley, David Lerman and Caroline Coudriet contributed to this report.

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