On Friday evening, high-stakes discussions over raising the US Debt ceiling resumed after Republicans walked out of the talks in frustration earlier in the day, blaming the White House for not negotiating seriously.
On Fox Business, House Speaker Kevin McCarthy said, “we’ll be back in the room tonight,” just before negotiators were spotted returning to the room where negotiations had previously been ongoing.
However McCarthy added, “But it is very frustrating if they want to come into the room and think we’re going to spend more money next year than we did this year. That’s not right. And that’s not going to happen.”
The talks resumed for approximately two hours, before they were ended for the evening at 8PM.
One of the key sticking points, as the White House pushes for a debt limit hike which will carry past the 2024 elections, is that Republicans are insisting on a spending cap for the next year’s budget which goes farther than just a freeze on the present top-line number, instead rolling spending levels back to the 2022 year levels.
In addition, McCarthy has said of his party’s additional demands, “Let’s spend less, let’s pull back the Covid money that we haven’t spent … work requirements … let’s do some permitting reform … I think we could probably find a pretty good agreement to be able to move forward.”
One problem is both sides have fractious caucuses. if a deal is struck to raise or suspend the debt limit, it will need to pass in both the House, which is led by the GOP, and the Senate, where Democrats are in control. Lawmakers on both sides of the aisle have noted that the eventual compromise bill may prove unsatisfactory to hardliners on both sides.
After negotiations broke up, a White House spokesperson was quoted by NBC News saying, “There are real differences between the parties on budget issues and talks will be difficult. The president’s team is working hard towards a reasonable bipartisan solution that can pass the House and the Senate.”
Just a day before Republicans walked out, McCarty had spoken of his optimism that a deal could be reached fast enough to hold a vote in the House next week.
On Thursday he had told reporters, “I see the path that we can come to an agreement.”
Investors have been watching closely this week for any indications there is progress in resolving the issue. Treasury Secretary Janet Yellen had noted that June 1st was the earliest Washington could find itself without the money to meet its obligations. The date had frightened Wall Street, as it was earlier than analysts and the White House had anticipated.
After a White House meeting on Tuesday with congressional leaders, Biden selected two of his closest aides to handle the talks, which had accomplished little to that point.
McCarthy had praised the choices, presidential counselor Steve Ricchetti and Office of Management and Budget Director Shalanda Young, noting both were “exceptionally smart.”