Lawmakers set to leave DC for Memorial weekend as debt ceiling talks stall – NBC10 Philadelphia

House Republicans nailed debt-ceiling negotiations on Thursday, showing risky political bravery as they left town for the holiday weekend, just days before the US could face an unprecedented default that would throw the global economy into chaos falls.

Inside the Capitol, in discussions with President Joe Biden’s team trying to work out a budget agreement, Speaker Kevin McCarthy said “every hour counts.” Republicans are demanding spending cuts, which Democrats reject as the price of raising the statutory debt limit.

“We’ve been at the White House all day,” McCarthy, of R-California, told reporters as he left the Capitol for the evening, followed by his top negotiators. “We are working hard to achieve this.”

In a White House speech, Biden said, “It’s about competing versions of America.” Still, both men expressed optimism that the gap between their positions could be bridged.

President Biden and Speaker Kevin McCarthy will meet in person Monday to discuss a way to prevent the country from defaulting on its bills. NBC’s Brie Jackson reports.

The White House said talks with Republicans had been productive, including via videoconference Thursday, although serious disagreements continued as the president fought over his priorities.

“The only way to move forward is with a bipartisan agreement,” Biden said. “And I believe we will come to an agreement that allows us to move forward and protects the hard-working Americans of this country.”

As the deadline approaches, it’s becoming clear that the Republican speaker – who leads a Donald Trump-affiliated party whose far-right flank put him in power, and who spoke to the former president this week – is now facing a potential crisis .

MPs are not expected to return to work until Tuesday, just two days after June 1, when Treasury Secretary Janet Yellen said the US could run out of money to pay its bills and face a sovereign default. Biden will also be absent, heading to the presidential retreat at Camp David, Maryland on Friday and his home in Wilmington, Delaware on Sunday. The Senate is on hiatus until after Memorial Day.

Meanwhile, rating agency Fitch put the United States’ AAA credit rating on “ratings watch negative,” warning of a possible downgrade.

At the end of the day, Democratic lawmakers lined up in the House of Representatives to blame “extreme” Republicans for the risky potential default. “Republicans have decided to leave town before sundown,” said House Minority Leader Hakeem Jeffries of New York.

After weeks of negotiations between Republicans and the White House, no agreement could be reached — in part because the Biden administration has refused to negotiate the debt limit with McCarthy, arguing that the country’s full faith and creditworthiness is not considered Leverage should be used to lure other partisans out of priorities.

McCarthy is sticking with drastic spending cuts that Republicans are demanding in exchange for voting to raise the country’s borrowing limit. The White House has offered to freeze spending at current levels for 2024 and cap spending for 2025, but the Republican leader says that’s not enough.

One idea is to set those top budget numbers, but then add a “snap-back” provision that enforces the cuts if Congress is unable to meet the new targets during its annual approval process.

“We have to spend less than last year. That’s the starting point,” McCarthy said.

McCarthy is under pressure from the right-wing in the House of Representatives not to back down on any deal, even if it means missing the June 1 deadline.

“Don’t take the exit five exits early,” said Rep. Chip Roy, R-Texas, a member of the Freedom Caucus. “Let’s hold the fort.”

Trump, the former president who is running for office again, has encouraged Republicans to “commit a default” if they don’t get the deal they want from the White House.

McCarthy said Trump told him, “Make sure you get a good deal.”

Failure to raise the country’s debt ceiling, currently at $31 trillion, to pay America’s bills already incurred poses a potentially chaotic federal default. Concerned retirees and social workers are among those already creating standard contingency plans.

Even if negotiators reach an agreement in the coming days, McCarthy has promised lawmakers he will stick to the rule of publishing any bill 72 hours before the vote — now likely Tuesday or even Wednesday. The Democrat-dominated Senate has vowed to move quickly and get the package to Biden’s desk just before the possible deadline next Thursday.

Pushing a debt ceiling hike to the last minute is not uncommon for Congress, but leaves little room for error in a volatile political environment. Both Democrats and Republicans are needed to pass the final package in a divided Congress.

“We still have a long way to go,” said Garret Graves, top Louisiana Republican negotiator, while juggling helming a Capitol tour for players and supporters of the Louisiana State University championship basketball team.

The contours of an agreement have been within reach for days, but Republicans are unhappy and are pushing the White House team for more.

One possible development is that Republicans will ease their call for an increase in defense spending, instead offering to keep it at the level proposed by the Biden administration, according to a person familiar with the talks, who has agreed to remain anonymous for their discussion becomes.

Republicans could achieve their goal of scaling back boosted funds for the Internal Revenue Service if they instead agree to allow the White House to wire that money to other domestic accounts, the person said.

According to a person familiar with the draft, the teams are also eyeing a proposal by Senator John Hickenlooper, D-Colo, to encourage development of power transmission lines that would facilitate the construction of an interregional power grid.

The White House has continued to argue that deficits can be reduced by removing tax breaks for wealthier households and some businesses, but McCarthy said he had already told the president at the February meeting that increasing revenue from tax hikes was off the table.

While Biden has ruled out invoking the 14th Amendment to raise the debt ceiling alone for now, House Democrats announced they have all agreed to a legislative “relief process” that would force a vote on the debt ceiling. But they need five Republicans to break with their party and get the majority to go ahead with the plan.

Other problems remain unsolved. Republicans also want to increase work requirements for state aid for recipients of food stamps, cash aid and the Medicaid health program, which Democrats say will not go ahead. It remains an issue on which both sides have “intervened,” according to another person familiar with the talks, who is remaining anonymous to discuss it.

It is all but certain that they will recover around $30 billion in unspent COVID-19 funds after the pandemic emergency is officially lifted.

The White House countered by proposing to keep defense and non-defense spending flat next year, which would save $90 billion in fiscal 2024 and $1 trillion over ten years.

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Associated Press contributors Chris Megerian, Josh Boak, Zeke Miller, and Mary Clare Jalonick contributed to this report.