House Speaker Kevin McCarthy and President Joe Biden agreed Monday night that their latest debt ceiling talks were “productive.” Yet that’s about as far as their agreements go with only nine days until the June 1 deadline for default.
Disagreement over just how much to limit government spending rests at the heart of the talks. GOP lawmakers are aiming to cut federal spending by more than $130 billion. McCarthy emphasized Monday night that, at the very least, Republicans want to spend less money in the upcoming fiscal year than Congress did in this fiscal year. The White House opposes that idea and is reportedly open to spending caps that freeze spending for many programs at current levels.
It’s not clear how the two sides will square that circle, though they could consider capping spending at fiscal year 2022 levels, adjusted for inflation, as a compromise.
The two sides also disagree on how long to impose caps on spending. Republicans want to cap annual spending growth at 1 percent for a decade, while Democrats have pushed to keep caps for just the next two years.
Republicans, meanwhile, are pressing for expanded work requirements for social safety net programs and streamlined permitting processes for energy projects as part of the talks.
The health of the global economy is in the balance, and members of Congress are running uncomfortably close to the deadline. Leaders had hoped for a deal over the weekend, but talks came in fits and starts while Biden was traveling back from the G7 summit in Japan. Congressional leaders still think lawmakers can pass legislation before June 1 if a deal emerges soon, but the House may have to vote over the weekend.
House rules require McCarthy to give members 72 hours to review bill text before voting on it—a demand GOP lawmakers could waive but aren’t likely to. McCarthy said Monday night he will abide by that rule.
Memorial Day plans are as much a driver of urgency for lawmakers as the default deadline, according to some members. “I don’t think there’s a panic,” Colorado Republican Rep. Ken Buck told CNN Monday. “There is a sense that we may not have the same Memorial Day Weekend that we thought we would.”
There may be some wiggle room on the default cutoff, but outside groups and the Congressional Budget Office largely agree with Treasury Secretary Janet Yellen’s June 1 timeline. The Bipartisan Policy Center projected this morning that the Treasury Department will most likely not have enough money to pay all of its bills sometime between June 2 and June 13.
The government hit its $31.4 trillion borrowing limit earlier this year, but the Treasury Department has been moving money around for months to avoid default using what’s known as “extraordinary measures.”
After meeting with McCarthy and Biden on Monday night, House Financial Services Committee Chairman Patrick McHenry said he sensed a “lack of urgency” from the White House to resolve the matter. He added he is concerned about markets responding poorly to delayed talks.
“It’s a very tough challenge” to reconcile the two sides’ priorities, McHenry told reporters, but “very reasonable” people are in the negotiating room. Talks are expected to continue today.
On the Floor
The Senate is out.
- Members of the House Judiciary Committee are meeting this morning for a hearing on the Biden administration’s policies on the southern border. Information and livestream here.
- A House Energy and Commerce subcommittee is examining federal efforts to grow American energy supply chains and manufacturing during a hearing this morning. Information and livestream here.
- Officials from the Department of Homeland Security and the FBI will appear before a House Homeland Security panel this afternoon for a hearing on Chinese government aggression. Information and livestream here.
- Members of the House Transportation and Infrastructure Committee will hold a hearing Wednesday morning on national emergencies and presidential authority. Information and livestream here.
- The House Ways and Means Committee will meet Thursday morning for a hearing on customs policies. Information and livestream here.