What to Know in Washington: Debt Limit Talks Hit a Wall
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Debt limit talks reached a fresh impasse Tuesday with negotiators far apart on key issues — especially the spending cuts demanded by Republicans — and no sign that President Joe Biden and Speaker Kevin McCarthy have spoken since their Monday meeting at the White House.
House Republicans escalated their accusations that Biden lacked urgency in negotiations, while a Democratic aide called McCarthy (R-Calif.) unwilling to compromise across a wide spectrum of disputed points, threatening the legislative prospects of a deal.
“Bottom line is that we’re going to have to see some movement or some fundamental change in what they’re doing,” Rep. Garret Graves (R-La.), one of McCarthy’s chief negotiators, said of the White House negotiating team following a two-hour meeting in the Capitol. “Right now, we don’t have additional meetings set up.”
McCarthy has told Biden that he did not intend to retreat from public refusals to accept additional taxes as part of an agreement, and has held that defense spending should increase while non-defense discretionary spending should be cut, according to a Democratic aide. Likewise, the White House has said Biden would flatly reject a proposal that imposes work requirements on federal health care programs, or any effort to repeal the president’s signature Inflation Reduction Act legislation.
What Work Rules Republicans Want as Part of Debt Ceiling Deal
If a default does occur, economists project it could throw the US into recession, with widespread job losses and other economic consequences spilling into the coming election year.
McCarthy likely has little room to give, as he looks to hold together a fragile GOP coalition. Republicans want to slash domestic spending over as many years as possible, while Democrats have offered slimmer cuts over a couple of years.
Republicans believe McCarthy has leverage in the talks, assisted by Biden’s initial refusal to negotiate over the debt ceiling. Polls show that Americans generally favor pairing spending cuts with raising the debt ceiling, though that approval drops when the programs that face cuts are detailed. Justin Sink and Ari Natter have the latest.
More Debt Limit Developments
Debt Limit Doomsday Clock: What June Looks Like for Treasury
Chris Condon outlines the Treasury’s day-to-day timeline, beginning June 1, of projected cash flows and other key events based off of estimates for revenue and spending drawn from analysis by the Bipartisan Policy Center and Goldman Sachs.
Band of Democrats Readies McCarthy Lifeline for Debt Compromise
A band of moderate House Democrats is preparing to help rescue McCarthy should he forge a bipartisan deal that sparks a revolt by ultra-conservatives.
Debt Ceiling Crisis Already Cutting Pay to Government Vendors
The debt ceiling crisis is presenting immediate concerns for federal contractors, even before the government reaches the X-date of running out of funds to pay its obligations.
BGOV Webinar — The Debt Limit: Outlook, Concerns, and Strategies: On Thursday join BGOV’s experts for a discussion about the debt limit crisis and how organizations can prepare for possible disruptions. BGOV’s reporters and analysts will dive into possible outcomes and how they could affect strategies, budgets, government programs, and federal contracting. Register here.
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To contact the reporters on this story: Brandon Lee in Washington at firstname.lastname@example.org; Michaela Ross in Washington at email@example.com
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