WASHINGTON — Negotiations to raise the debt ceiling were suspended again on Friday shortly after they resumed. Republican Speaker of the House of Representatives Kevin McCarthy said it was time to put negotiations “on hold” and the White House acknowledged the existence of “real differences”.
Top Republican negotiators representing McCarthy walked out of the meeting shortly after it began Friday night, saying no further talks were scheduled for the day and they were unsure what the next steps would be.
“We had a very frank discussion about where we are, where we need to go and what is reasonably acceptable,” said Rep. Garrett Graves, who led the talks for Kevin McCarthy.
Another negotiator, Congressman Patrick McHenry, said he was not at all confident of reaching an agreement with the White House on budget issues.
The Biden administration is seeking a deal with McCarthy-led Republicans as the country heads toward a potentially catastrophic default if the government fails to raise the federal borrowing limit, which now stands at around $31 billion. of dollars.
Earlier in the day, McCarthy said the impasse could be resolved “easily” if Biden’s team agreed to some of the federal spending cuts demanded by Republicans.
According to a source close to the talks, who spoke on condition of anonymity, the main sticking point is the 2024 budget cap. Democrats vehemently oppose cuts to social programs proposed by Republicans, considering them as potentially harmful to American families.
A White House official, also speaking on condition of anonymity, said there were “real differences” between the parties on budget issues and that further negotiations “would be difficult”.
The official added that the president’s team was working hard on a “reasonable bipartisan solution” that could be approved by the House of Representatives and the Senate.
Markets on Wall Street reacted lower to reports of a sudden halt in talks due to fears of a default.
Biden, who is in Japan to attend the G7 summit, has yet to comment on the situation. The president had previously decided to cut short the rest of his trip. He is expected to return to Washington on Sunday.
Republicans are pushing for deep spending cuts, arguing that the budget deficit must be brought under control, cutting spending to FY22 levels and limiting future growth. Biden’s team opposes restrictions proposed by Republicans in a bill approved by the House of Representatives, resulting in 30% cuts to some programs, but not including defense spending and veterans.
McCarthy faces pressure from her party’s far right, which is pushing for the toughest terms. The president risks jeopardizing his leadership in the Lower House if he does not move, but many Republicans are unlikely to agree to a deal with the White House.
At the same time, Biden is under pressure from Democrats, especially progressives, who believe the spending cuts will hit too hard on social programs that the poor and poor Americans rely on in the first place.
Some Democrats want Joe Biden to use his powers under the 14th Amendment to the Constitution and raise the national debt ceiling with a presidential decision. However, this idea raises legal questions about the powers of the head of state, and Biden mentioned that he was not yet inclined to consider such an option.
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