With a potential default just over a week away, a resolution remained elusive and Republican leaders told lawmakers they could return home for the holiday break.
With a potential federal default just over a week away, a resolution to the debt limit crisis remained out of reach on Wednesday as White House and top Republican negotiators reported no breakthrough in another marathon day of discussions and members of Congress prepared to leave the capital for the holiday weekend.
Negotiators met for roughly four hours on Wednesday afternoon at the White House and were silent upon leaving, which some regarded as a hopeful sign after days of public posturing from both sides. Representative Patrick T. McHenry, Republican of North Carolina and a key bargainer, rushed past reporters at the Capitol saying: “No news.”
Speaker Kevin McCarthy stayed uncharacteristically close-lipped after the meeting ended, leaving the Capitol on Wednesday night without speaking to reporters. But he expressed cautious optimism, telling Fox Business that “things are going a little better.”
“I think today they would say they’re making progress,” Mr. McCarthy said of the negotiators.
With no deal imminent, Republican leaders told lawmakers they were free to return home for the Memorial Day weekend, but could be summoned back on short notice to vote. The announcement made clear that Mr. McCarthy and his deputies did not expect a resolution to avert a default to materialize until next week, just days from the projected June 1 deadline.
At the same time, the speaker sought to reassure the markets that a deal could be reached.
“I would not, if I was in the markets, be afraid of anything in this process,” he said. “I wouldn’t scare the markets in any shape or form. We will come to an agreement worthy of the American public, and there should not be any fear. Money is coming in every day.”
Before the meeting, Mr. McCarthy sought to pressure President Biden and congressional Democrats to accept spending cuts to domestic programs in exchange for raising the debt limit and allowing the Treasury Department to avoid missing payments.
“You have to spend less than you spent last year,” Mr. McCarthy said at a news conference in the Capitol as Biden administration and Republican negotiators gathered at the White House. “That is not that difficult to do. But in Washington, somehow that is a problem.”
The administration has resisted cuts and instead pushed for a freeze on current spending levels. With Republicans insisting there be no cuts to defense or veterans’ programs, the brunt of the reductions would affect social programs that Democrats favor.
Right-wing Republicans have vowed to oppose any compromise that retreats from cuts that were part of their debt-limit bill, which was approved last month along party lines, so Mr. McCarthy is likely to need a substantial number of Democratic votes to pass any agreement. But congressional Democrats are resisting cuts in the overall budget.
Representative Pramila Jayapal of Washington, the chairwoman of the Progressive Caucus, said at a news conference that White House officials told her on Tuesday night that House G.O.P. negotiators had rejected proposals that could have reduced the deficit by $3 trillion, including closing tax loopholes and imposing new taxes on the highest earners. Mr. McCarthy has repeatedly said that Republicans will not accept any tax increases.
“We will continue to call out and reject this reckless hostage-taking from extreme MAGA Republicans,” Ms. Jayapal said.
In an effort to pressure Mr. McCarthy and other Republicans not to accept any deal that falls short of the House-passed bill, Representative Chip Roy of Texas, an influential hard-liner, released a memo asserting that every measure in the legislation was “critical.”
“None should be abandoned solely for the quest of a ‘deal’,” Mr. Roy wrote.
Many Democrats, too, were arguing against any compromise. Their leaders announced on Wednesday that the final two members of their caucus had signed a discharge petition aimed at bypassing Republican leaders and forcing debt-limit legislation to the floor. With their 213 signatures, Democrats would need at least five Republicans to break ranks and sign the petition for it to trigger such a vote. Democratic leaders called on Republicans to show that they are not allied with the most extreme wing of their party and help advance the petition to avert an economic catastrophe.
“It does appear increasingly likely that House Republicans want a dangerous default, they want to crash the economy and they want to trigger a job-killing recession,” said Representative Hakeem Jeffries, Democrat of New York and the minority leader. “It’s my hope that five Republicans from New York or California or other moderate districts throughout the country can prove me wrong.”
The House is set to begin a weeklong Memorial Day recess on Friday. Representative Steve Scalise of Louisiana, the No. 2 Republican, advised lawmakers on Wednesday night that they should be prepared to return to the Capitol within 24 hours to approve a compromise bill. Mr. McCarthy has vowed to give lawmakers 72 hours to review any plan.
Treasury Secretary Janet L. Yellen has warned repeatedly that the government could exhaust its ability to meet all of its obligations by June 1.
Source: Economy - nytimes.com
