Biden, McCarthy hold debt ceiling talks as signs indicate deal is near | american politics

President Joe Biden and Congressional Republican Kevin McCarthy had a phone conversation on Saturday night, according to a person familiar with their plans, amid signs that an agreement in ongoing debt ceiling negotiations was on the way. point to be concluded.

McCarthy said earlier on Saturday he was making “progress” in talks on raising the federal government’s debt ceiling as the nation faces default in just over a week.

However, just before the call between Biden and McCarthy, Republican negotiator Patrick McHenry told reporters that a “major disagreement” remained between his party and Biden’s Democrats.

“Republicans want to cut spending. This is what we have proposed with our approach to raising the debt ceiling, with work requirements so that able-bodied people can re-enter the labor market. These things are big issues, and there’s no way to hide them,” he said.

The Associated Press reported that work requirements for federal food aid recipients emerged as a final sticking point in the talks, even as Biden said Friday that an agreement on raising the the debt was “very close”.

Biden’s optimism came after the deadline by which the US government would run out of funds to pay all its bills was pushed back to June 5, giving both sides more wiggle room but also boosting the prospects for talks – which almost seemed like a deal on Friday. evening – could now stretch into next week.

On Saturday, Republican House Speaker Kevin McCarthy told reporters he was making “progress” in negotiations with Biden, saying, “We don’t have a deal… We’re not there yet. . We have made progress, we have worked well early this morning and we are there now,” according to Reuters.

When asked if Congress could meet the June 5 deadline, McCarthy quickly replied, “Yes,” Hill reports.

Biden and McCarthy appear to be closing in on a two-year budget cut deal that would also extend the US debt limit through 2025 after the next presidential election.

Both sides have suggested that one of the main delays is a Republican effort to increase work requirements for recipients of food stamps and other federal assistance programs, a longtime Republican goal that many Democrats support. are vigorously opposed.

White House spokesman Andrew Bates said the Republican proposals on the issue were “cruel and senseless” and said Biden and Democrats would oppose them.

But at the same time, Louisiana Congressman Garret Graves, one of McCarthy’s negotiators, was blunt when asked if the Republicans could cave in, saying, “No, not a chance.

Bates condemned House Republicans in a statement to Politico, accusing them of “threatening to trigger an unprecedented recession and cost the American people more than 8 million jobs unless they can get food out of the mouths of starving Americans”.

Americans and the world have watched with growing fear and anger as negotiations that could plunge the global economy into chaos drag on in yet another repeat of the usual political theater that still seems to surround the issue in Washington.

Still, Biden was optimistic as he headed out for Memorial Day weekend at Camp David, saying, “It’s very close, and I’m optimistic.”

In a blunt warning, Treasury Secretary Janet Yellen said Friday that failure to act before the new default date “would cause serious hardship for American families, harm our position as a global leader and raise questions about our ability to defend our national security”. interests”.

Anxious retirees and others were already making contingency plans for missed checks, with the next Social Security payments due next week.

Any deal reached by the White House and Republican negotiators should be a political compromise, with the support of Democrats and Republicans needed to push through the divided US Congress.

McCarthy has promised to give his Republican members 72 hours to strike any deal, pushing back a vote until at least Tuesday and possibly much later in the week, depending on when a deal can be announced.

On Saturday, Axios revealed that Independent Senator Kyrsten Sinema had joined the negotiations, according to people familiar with the matter.

The outlet reported that as Sinema tried to use his new independent stance to help negotiators reach a compromise, some Democratic lawmakers privately feared his involvement could limit major renewable energy proposals.

Currently, Republicans are seeking changes to the National Environmental Policy Act to remove legal restrictions for oil and gas companies. Meanwhile, Democrats have urged the Biden administration and Democratic leaders in Congress to oppose any changes to Nepa.

Earlier this month, Arizona Rep. Raúl Grijalva, a senior member of the House Natural Resources Committee, sent a letter — along with 79 other Democrats — to Biden and Democratic leaders, urging them to s oppose environmental rollbacks in any agreement.

Ultimately, the focus would be particularly on the reaction of right-wing Republicans in the House, especially those in the Freedom Caucus mostly aligned with former US President Donald Trump.

“Raising the debt ceiling is not a ‘concession’ by Republicans – it’s their constitutional duty,” New York Democratic Rep. Dan Goldman said. tweeted Friday.

“Republicans are extorting the American people by threatening to crater the economy to extract unreasonable demands they could never get in the ordinary appropriation process,” he added.

Several rating agencies said they had put the United States on watch for a possible downgrade, which would raise borrowing costs and undermine its position as the backbone of the global financial system.

A similar standoff in 2011 led Standard & Poor’s to downgrade its rating on US debt, hammering markets and driving up government borrowing costs.