There’s still no deal in place for Congress and the White House to avoid a catastrophic default on the nation’s debt. But even as talks continued into the weekend, one thing was already clear: A lot of Republicans and Democrats don’t like the deal, whatever it is.
In the middle, negotiations broke down for much of the day on Friday, before resuming later in the evening. With the clock ticking toward a possible June 1 deadline, the two sides still seemed far apart. The White House offered to limit defense and nondefense spending, but Republicans objected, saying the administration’s proposal didn’t cut the long-term national debt enough, three people with knowledge of the matter told The Washington Post, speaking on the condition of anonymity to describe the private talks.
After huddling with fellow GOP negotiators Rep. Garret Graves (R-La.) and Rep. Patrick T. McHenry (R-N.C.) on Saturday, House Speaker Kevin McCarthy (R-Calif.) accused the White House of moving “backwards,” and said he did not think the talks could “move forward until the president can get back in the country.” (Biden is due to return from Japan on Sunday.)
“They actually want to spend more money than we spent this year,” McCarthy said. “We can’t do that. We all know how big this deficit is.”
If Biden and McCarthy do manage to reach a compromise, leaders in both chambers of Congress will then have to keep enough of their members on board to pass a deal before the government runs out of money. That could center negotiations on issues most palatable to moderates, alienating more staunch conservatives and liberals who might not vote for the final bill. Even if the most conservative and most liberal members of both chambers oppose legislation enacting a deal, it could still easily pass if other lawmakers back it.
There were signs this week that congressional leaders were already preparing for such an outcome. In a statement Thursday, Senate Majority Leader Charles E. Schumer (D-N.Y.) offered a simple word of caution: “No one will get everything they want.”
At a news conference in Hiroshima on Saturday, Biden said that he was “not at all” concerned about the ongoing debt talks and that any kind of negotiation evolves in stages.
“I still believe we’ll be able to avoid a default and we’ll get something decent done,” Biden said.
Last month, the House approved its GOP-backed bill to raise the debt ceiling while also slashing federal spending and repealing many of Biden’s moves on climate change and student debt.
But those proposals were a total nonstarter for the Biden administration and congressional Democrats, who argue that the “Limit, Save, Grow Act” amounts to economic hostage-taking, turning the looming debt ceiling deadline into political dynamite.
With dwindling time, McCarthy and the White House are trying to find common ground. In a show of urgency, Biden cut short a foreign trip to return to Washington on Sunday, straight from the G-7 summit in Japan. McCarthy has said he hopes to have a vote this coming week in the House, suggesting a deal would have to come together in a matter of days.
There’s plenty of ground to make up in the meantime. Conservatives are angling for major spending cuts, as well as a clawback of unspent covid aid funds. Republicans are also pushing for changes to the permitting process for energy projects, with the goal of helping fossil fuel projects.
This past week, McCarthy said the inclusion of work requirements for some social programs was a “red line” that Republicans had to have, though few specifics have emerged.
Several people close to the process also said lawmakers remained divided over the extent and time frame of new restrictions on federal spending. Democrats want spending caps to last roughly two years, after which appropriators could spend more again. But Republicans have sought to extend the duration of the restrictions to as long as a decade, because the longer the constraints are in effect, the more the deficit will be reduced.
Meanwhile, a growing coalition of liberal lawmakers have come out strongly against work requirements, arguing that federal food assistance programs or Medicaid are the wrong places to try to cut a deal. Democrats are also pushing for permitting reform, but their priorities revolve around building new transmission lines for clean-energy projects that got money from last year’s Inflation Reduction Act.
White House officials have also floated roughly a dozen tax plans that would cut the deficit as part of a broader budget agreement, including a measure aimed at cryptocurrency transactions and another for large real estate investors. But those overtures were turned down by GOP aides.
As the talks drag on, more lawmakers are distancing themselves from the process — or insisting it stop altogether.
That’s what the House Freedom Caucus did Thursday afternoon. In a statement, the roughly three dozen lawmakers from the conservative caucus said the House has “done its job.” The group was very influential in shaping the “Limit, Save, Grow Act.” But its public opposition to the talks with the White House came as several conservative lawmakers say they privately fear that their priorities will get axed in any bipartisan agreement, especially since McCarthy could still manage to pass a deal without them if enough House Democrats eventually come on board.
In an interview this past week after the caucus issued its statement, the group’s leader, Rep. Scott Perry (R-Pa.), blasted Senate Democrats for failing to put forward a proposal and demanded the chamber return from recess and get to work on trying to pass its own bill. He blasted “hard, radical left-wing senators” for “going out and saying that it has to be a clean debt ceiling or nothing.”
But Perry said a “clean” debt ceiling bill can’t pass the Senate, “or they already would have” done it. He did not go as far as to say the caucus could oppose a deal between Biden and McCarthy, as negotiations continued in secret, out of view of the far-right bloc.
“The Freedom Caucus members are discerning, they are serious about it,” he said. “We understand it’s not going to be perfect.”
Rep. Ralph Norman (R-S.C.), another Freedom Caucus member, told The Washington Post that “time is up.” Further delay would make it even more likely that a final agreement is a no-go for his conservative colleagues, he said.
“The longer it goes, they will ramp up the pressure to settle, and we’re just not in a position to settle,” Norman said.
Then there is the left flank of the Democratic Party. Hours before the Freedom Caucus’s announcement, five senators convened a news conference urging Biden to invoke the 14th Amendment and keep borrowing, arguing that the debt ceiling is unconstitutional.
Sen. Bernie Sanders (I-Vt.) acknowledged that the 14th Amendment approach was “not perfect.” But he said it was “the best solution we have.”
“Let me be clear, we will not default on our debts, and we will not default on our commitments to environmental justice, communities who fought relentlessly to secure the historic climate and clean-energy investments in the historic Inflation Reduction Act,” Sen. Edward J. Markey (D-Mass.) said at the news conference.
Sens. John Fetterman (D-Pa.) and Elizabeth Warren (D-Mass.) have also threatened to vote against a deal that includes work requirements, potentially imperiling Democratic support in a narrowly divided Senate. In a statement this past week, Fetterman said that he “cannot in good conscience support a debt ceiling proposal that pushes people into poverty.”
On Friday, 66 members of the Congressional Progressive Caucus also called on Biden to use executive authority, especially as an alternative to unwanted concessions.
“If the options are either agreeing to major cuts to domestic priorities under the Republican threat of destroying the economy and moving forward to honor America’s debts, we join prominent legal scholars, economists, former budget officials, and a former president in advocating for invoking the 14th Amendment of the Constitution,” caucus members wrote in a letter to Biden.
Meanwhile, House Democrats this past week started collecting signatures for a discharge petition to act on legislation that would raise the debt ceiling without other policy changes. The long-shot approach is meant to bypass House Republicans and was endorsed Wednesday by House Minority Leader Hakeem Jeffries (D-N.Y.), even as he continued to show hope for a bipartisan solution.
Tony Romm and Jeff Stein contributed to this report.
What to know about the U.S. debt ceiling
The latest: Biden and McCarthy announced Saturday they’d reached an “agreement in principle” to raise the debt ceiling. The House will vote on it as soon as Wednesday. If the debt ceiling isn’t raised by the deadline, here’s what a government default means and the payments at risk. Here are the negotiators who have been working toward a debt ceiling deal.
Understanding the debt ceiling fight: Biden and the House Republican leadership have been on a collision course over the national debt limit. In this comic, see how hitting the debt ceiling could unleash chaos. Here’s when the debt ceiling battle could end.
What is at stake? Invoking the 14th Amendment to dodge the debt limit is risky, White House officials say. If the debt limit is breached, Biden warned that it could send the U.S. economy into a free fall. The debt ceiling breach could wipe out 8 million jobs, a recent analysis found. Amid consumer anxiety over the uncertainty, financial experts warn against making fear-based decisions.