A second meeting on Friday between White House and Republican congressional negotiators on raising the federal government’s $31.4 trillion debt limit reported no progress by either side and no additional meetings have been scheduled.
It came at the end of acrimonious negotiations lasting several hours with less than two weeks to go before June 1, when the Treasury Department warned the federal government may be unable to pay back all of its debt. This will trigger a catastrophic default.
The White House acknowledged that “serious differences” remain with Republicans who control the House of Representatives and who have said they will not approve an increase in the federal government’s borrowing limit without agreement on sharper spending cuts.
“There continue to be real differences between the parties on these issues,” White House spokeswoman Karine Jean-Pierre told reporters in Hiroshima, Japan. President Joe Biden is attending a meeting of leaders of the Group of Seven wealthy nations.
Prominent Republicans in the talks said no progress had been made on Friday.
Republican Representative Garrett Graves told reporters after a second brief meeting at the Capitol with White House officials, “Talking about where we are, there was a very frank discussion about where things should be.”
“That was not tonight’s conversation,” Graves said. The time of the next meeting was not determined.
He echoed House of Representatives Speaker Kevin McCarthy’s remarks that progress is needed to change the “trajectory” of the US government’s deficit spending and rapidly rising debt.
“We have to spend less than we did the year before,” McCarthy said.
Talks on Biden’s meeting with world powers in Japan are stuck. A second Republican negotiator, Representative Patrick McHenry, said he did not believe the two sides could meet McCarthy’s goal of reaching an agreement later this week, which would be submitted to Congress for passage in the coming days. May go.
White House senior adviser Steve Ritchetti left the meeting room, telling reporters that he was “not assessing” the talks.
McCarthy told reporters that there had been no “movement” from the White House toward Republican demands, before a meeting on Friday was abruptly ended.
US stocks ended the week on a softer note following reports of stalled talks. Republicans have been pushing for sharper spending cuts in exchange for an increase in the government’s self-imposed borrowing limit, steps regularly needed to cover the cost of spending, and tax cuts previously approved by lawmakers.
Republicans control the House of Representatives by a 222-213 margin, while Biden’s Democrats hold a 51-49 Senate majority, making it difficult to thread the needle with a deal that receives enough votes to pass both chambers. Will do
Democrats are pushing to keep spending steady at this year’s level, while Republicans want a return to 2022 levels. A plan passed by the House last month would lead to a sweeping 8% cut in government spending next year.
The plan does not specify whether spending cuts would be made, but some Republicans have said they would shield programs for the military and veterans. Democrats say that would force average cuts of at least 22% on domestic programs like education and law enforcement, a charge top Republicans have not disputed.
Some Republicans have criticized Biden for traveling to Japan at a crucial point in the talks.
Biden and McCarthy spent most of the year in a standoff with the White House insisting on a “clean” increase in the debt ceiling without conditions. Republicans said they would vote only for a deal that cut spending.
They agreed to two-way talks, with the White House represented by Shalanda Young, director of the Office of Management and Budget, and Ritchetti. McCarthy was represented by Graves & McHenry.
Republicans have taken a tough stand. On Thursday, the House Freedom Caucus urged the Senate to vote on an already passed House bill that would extend the limit through March in exchange for 10 years of sharp spending cuts.
House and Senate Democrats have raised concerns over the inclusion in negotiations of new work requirements for some federal benefit programs for low-income Americans.
The last time the nation got this close to default was in 2011, with a Republican-led House as well as a Democratic President and Senate.
Congress ultimately avoided default, but the economy suffered severe setbacks, including a first-ever downgrade of the United States’ top-tier credit ratings and a major stock selloff.