Debt limit talks stalled as McCarthy says White House has ‘moved backwards’ since Republican walk-out

“I don’t think we’re going to be able to move forward until the president can get back into the country,” McCarthy told reporters at the Capitol on Saturday. “Just from the last day to today they’ve moved backwards. They actually want to spend more money than we spend this year.”

McCarthy’s comments confirmed a renewed shift in tone to mutual recrimination after the White House suggested earlier Saturday that Republicans were negotiating in bad faith. The clock ticking is with Treasury Secretary Janet Yellen having said the US could lose its ability to pay all its bills by June 1. 

Biden signaled earlier Saturday that he remains confident the US government can avoid a catastrophic default. 

Spending Cuts

Republicans and the White House are battling over spending cuts, which GOP lawmakers demand as the price for raising the federal borrowing limit. 

“We have to spend less than we spend this year,” McCarthy said, repeating his bottom-line demand.

Lawmakers are stepping up their attacks on each other as talks have stalled — despite showing signs of progress earlier in the week.

“I think that Bernie Sanders and the socialist wing of their party has had real effect on the president, especially with him being out of the country,” McCarthy said.

White House press secretary Karine Jean-Pierre said in a press briefing from Hiroshima, Japan, on Saturday that there were “real differences between the two sides.”  And Deputy Press Secretary Andrew Bates said House Republicans were “taking the American economy hostage,” and portrayed the GOP caucus as beholden to right-wing members.

For a deal to succeed, cuts must be significant enough to pacify conservative Republicans, who have backed McCarthy’s speakership on the condition that he extract serious spending reforms without raising taxes or slashing military spending and veterans benefits. 

But a plan also has to be palatable to Democrats, who hold a Senate majority and will likely need to provide between 50 and 100 votes in the House. Few in the president’s party want to see domestic programs cut, especially without corresponding cuts to the Pentagon budget or the closing of tax loopholes used by the wealthy and large corporations.

The desire to wait for Biden may be informed by a Republican belief that the president will ultimately decide to sacrifice progressive priorities to defuse the biggest threat to the economy ahead of his reelection campaign. The president has already de-facto retreated from his pledge not to negotiate over raising the debt ceiling.

The debt-limit fight, which could trigger a first-ever US payments default, threatens to inflict pain on the global economy. It has shadowed Biden’s overseas trip and the president previously decided to cut his travels short in order to return to Washington for the final stages of negotiation.

A Republican walk-out of talks Friday in Washington shattered hopes that negotiators were nearing a deal to raise the borrowing cap, sending stocks plunging.

McCarthy had hoped to at least forge an agreement on an outline for a deal this weekend to tee up a House floor vote on legislation next week.

The Senate has left Washington for their Memorial Day recess, but senators have been told to be prepared to return on 24-hours notice if needed.

Biden will meet with Ukrainian President Volodymyr Zelenskiy during the G-7 on Sunday, according to a White House statement. He’s scheduled to return to Washington late Sunday. 

–With assistance from Justin Sink and Kailey Leinz.