McCarthy says negotiators are ''closer to an agreement'' on debt crisis, but no deal yet

McCarthy's comments echoed the latest assessment from Biden

Biden Debt Limit President Joe Biden meets with House Speaker Kevin McCarthy to discuss the debt limit in the Oval Office of the White House, Monday, May 22, 2023 | AP

House Speaker Kevin McCarthy said Saturday that Republican negotiators were closer to an agreement that would resolve the looming debt crisis, but had not reached a deal with President Joe Biden.

  He said there was no firm timeline for a final compromise that would raise the nation's borrowing limit and avoid a catastrophic default while also making spending cuts that House Republicans are demanding. 

House negotiators left the Capitol after 2 a.m. and returned hours later.

We'll get it when it gets right, McCarthy, R-Calif., said as he arrived on Capitol Hill.

McCarthy's comments echoed the latest assessment from Biden, who said Friday evening that bargainers were very close.

Their optimism came as the deadline to avert a potentially disastrous default was pushed back to June 5, giving the two sides a bit of extra time as they scramble for a deal.

Both sides have suggested one of the main holdups is a GOP effort to expand existing work requirements for recipients of food stamps and other federal aid programmes, a longtime Republican goal that Democrats have strenuously opposed. The White House said the Republican proposals were cruel and senseless.

McCarthy declined to elaborate on those discussions. One of his negotiators, Louisiana Rep. Garret Graves, said there was not a chance that Republicans might relent on the issue.

The extended  X-date,  or default deadline, was laid out in a letter Friday from Treasury Secretary Janet Yellen, a brief reprieve from her earlier June 1 estimate. 

That didn't stop Americans and the world from uneasily watching the negotiating brinkmanship that could throw the U.S. economy into chaos and sap world confidence in the nation's leadership.

Yet Biden was upbeat as he departed for Camp David on Friday evening, saying: It's very close, and I'm optimistic.

Failure to lift the borrowing limit, now $31 trillion, to pay the nation's incurred bills, would send shockwaves through the U.S. and global economy. Yellen said failure to act by the new date would cause severe hardship to American families, harm our global leadership position and raise questions about our ability to defend our national security interests.

Anxious retirees and others were already making contingency plans for missed checks, with the next Social Security payments due next week.

Biden and McCarthy have seemed to be narrowing on a two-year budget-cutting deal that would also extend the debt limit into 2025 past the next presidential election. 

The contours of the deal have been taking shape to cut spending for 2024 and impose a 1% cap on spending growth for 2025.

The Republican proposal on work requirements would save $11 billion over 10 years by raising the maximum age for existing standards that require able-bodied adults who do not live with dependents to work or attend training programs.

Current law applies those standards to recipients under the age of 50. The GOP plan would raise the age to include adults 55 and under. It would lower the number of exemptions that states can grant to some recipients subject to those requirements.

Biden has said the work requirements for Medicaid would be a nonstarter. He initially seemed potentially open to negotiating minor changes on food stamps, now known as the Supplemental Nutrition Assistance Program, or SNAP, but his position has appeared to harden.

Any deal would need to be a political compromise in a divided Congress. Many of the hard-right Trump-aligned Republicans in Congress have long been skeptical of the Treasury's projections, and they are pressing McCarthy to hold out.

Lawmakers are not expected to return to work from the Memorial Day weekend before Tuesday, at the earliest, and McCarthy has promised lawmakers he will abide by the rule to post any bill for 72 hours before voting.

The Democratic-held Senate has stayed out of the negotiations, leaving the talks to Biden and McCarthy. Senate Majority Leader Chuck Schumer of New York has pledged to move quickly to send a compromise package to Biden's desk.

Weeks of talks have failed to produce a deal in part because the Biden administration resisted for months on negotiating with McCarthy, arguing that the country's full faith and credit should not be used as leverage to extract other partisan priorities.

But House Republicans united behind a plan to cut spending, narrowly passing legislation in late April that would raise the debt ceiling in exchange for the spending reductions. 

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