House Speaker Kevin McCarthy, R-Calif., speaks to reporters about debt ceiling negotiations at the U.S. Capitol Monument on Wednesday, May 24, 2023.
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Top Republican Congress Kevin McCarthy said on Saturday that he was making “progress” in negotiations with the Democratic President Joe Biden on raising the federal government’s debt ceiling, as the nation faces default in more than a week.
Time is tight. The Treasury Department on Friday said the government will lack the funds to pay all of its bills by June 5 without congressional action, a deadline a little later but more certain than anticipated. previous default notice as early as June 1.
And any agreement in principle between Biden and House Speaker McCarthy would be the start of an easily week-long process to pass legislation through the narrowly divided and bitterly divided Congress.
“We don’t have a deal,” McCarthy told reporters. “We’re not there yet. We’ve made progress, we’ve worked well early this morning. And now we’re back on it.”
Hardline Republicans have threatened to block any bill that fails to meet their expectations, including drastic spending cuts.
Radical Democrats have also threatened to withdraw support for some of the proposed compromises, particularly around imposing new job requirements on their anti-poverty programs. federal.
“It’s very close and I’m very optimistic,” Biden told reporters Friday.
Republicans control the House of Representatives by 222-213, while Democrats have a 51-49 majority in the Senate, leaving a narrow path to pass any deal by the Democratic president and Republican spokesman into law.
Republicans have sought to sharply limit government spending over the next 10 years to slow the rate of growth in U.S. debt, which now equates to the economy’s annual output.
But the tentative deal will likely fall short of their goals.
The two sides have temporarily reached an agreement to raise the debt ceiling enough to meet the country’s borrowing needs until the presidential election in November 2024.
It will boost spending on the military and veterans care, while limiting spending on many arbitrary domestic programaccording to sources familiar with the negotiations.
McCarthy said Republicans are still pushing for reforms to energy licensing, including making it easier to drill for gas and oil.
Republicans have rejected Biden’s tax hike proposal, and neither side has shown a willingness to take on the rapidly growing retirement and health programs that will cause debt to skyrocket in the coming years.
Biden’s signature infrastructure and green energy law will remain intact, while the Internal Revenue Service will see their recent budget increase slightly reduced.
But safety net programs remain a sticking point. Republicans want to tighten job requirements for the Medicaid for the poor and the SNAP food assistance program. Democrats say that will create more barriers for those struggling to make ends meet.
Both programs expanded significantly during the COVID-19 pandemic but have shrunk in recent months.
Congress’ failure to raise the self-imposed debt ceiling by June 5 could trigger a default that will rock financial markets and plunge the United States into a deep recession.
Some credit rating agency has said it has subject the United States to a possible downgrade, which would increase borrowing costs and reduce the United States’ position as the backbone of the global financial system.
A similar confrontation in 2011 led Standard & Poor’s to downgrade the US debt rating, negatively impacting the market and driving up government borrowing costs.