House

McCarthy hits pause on debt ceiling talks

by Mike Lillis and Mychael Schnell - 05/19/23 11:51 AM ET

Top GOP lawmakers negotiating a debt ceiling compromise with the White House on Friday cut the talks short, signaling at least a temporary breakdown in the process as the clock ticks toward an imminent default.

The Republicans left a meeting with White House officials in the Capitol saying the two sides remained too far apart to continue the in-person discussion and accusing the White House of being “unreasonable.”

Speaker Kevin McCarthy (R-Calif.) arrived at the Capitol after talks had broken down and said the White House was simply not willing to accept spending cuts at the levels Republicans are insisting upon.

“We’ve got to get movement by the White House, and we don’t have any movement yet. So, yeah, we’ve gotta pause,” McCarthy said.

“Yesterday I really felt we were at the location where I could see the path. The White House is just — look, we can’t be spending more money next year. We have to spend less than we spent the year before. It’s pretty easy.”

Speaker Kevin McCarthy is seen inside the Capitol in a motion-focused photo

Speaker Kevin McCarthy (R-Calif.) speaks to reporters at the Capitol following a meeting at the White House with Congressional leaders and Vice President Harris to discuss the debit ceiling on May 16. (Greg Nash

Rep. Garret Graves (R-La.) hours earlier had emerged from a meeting with White House officials in the Capitol voicing frustration that the sides had not made more progress.

“We decided to press pause because it’s just not productive,” Graves told reporters while walking alongside Rep. Patrick McHenry (R-N.C.), another negotiator. He added the White House negotiators are being “unreasonable right now.”

“Until people are willing to have reasonable conversations about how you can actually move forward and do the right thing, then we’re not gonna sit here and talk to ourselves,” he later added. “That’s what’s going on.”

McHenry said later that the sides were simply too far apart to continue the in-person meeting on Friday, citing differences “on many issues.” He declined to name them.

“They have serious people negotiating, and they’re driving a hard bargain. We’re not at a sufficient moment for this package to meet the expectations the Speaker set for us,” McHenry, chairman of the Financial Services Committee, said just before entering McCarthy’s office. “We’ve taken a pause. And we have significant gaps that have to be bridged for us to merit more conversation.”

More debt ceiling coverage from The Hill:

It’s unclear when the talks will resume. Asked if there would be more in-person meetings this weekend, Graves said he’s “not sure right now.” McHenry said that, “at this point,” there is no plan for another meeting on Friday.

The comments mark a shift in tone from those delivered a day earlier by McCarthy, who had expressed optimism that the sides were making progress and an agreement was in reach.

The White House had also expressed optimism as recently as late Thursday, saying there had been “steady progress” in debt limit talks. A White House official said President Biden — who is in Japan attending the Group of Seven summit — had requested an update on the negotiations.

“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,” a White House official said Friday.

McCarthy said he had spoken with Graves, but not Biden.

FILE – Rep. Garret Graves, R-La., a key legislator working on the debt ceiling bill for House Speaker Kevin McCarthy, walks past the chamber at the Capitol in Washington, Wednesday, April 26, 2023. (AP Photo/J. Scott Applewhite, File)

McCarthy has warned that negotiators must come to an agreement on at least the broad parameters of a deal by this weekend if a bill is to have any chance of moving through both the House and Senate by June 1, the earliest date when the Treasury Department has warned of a default.

“We’re not there. We haven’t agreed to anything yet. But I see the path that we could come through,” McCarthy told reporters Thursday morning. Laying out his preferred timeline, he added that “it’d be important to try to have the agreement, especially in principle, by sometime this weekend.”

Graves’s pessimistic characterization of the negotiations comes as both sides are under heavy pressure from their respective bases to hold firm on their priorities.

For McCarthy and the Republicans, that means demanding that any increase in the debt ceiling be accompanied by steep cuts in federal spending, similar to those included in the GOP debt limit package that passed through the lower chamber last month without any Democratic support.

For Biden and the Democrats, it means resisting those cuts — which would slash social benefits programs championed by the party — and keeping the debt ceiling package as close as possible to the “clean” bill initially demanded by the president.

Adding to the pressure for McCarthy Republicans, however, the conservative House Freedom Caucus adopted an official statement Thursday that called for “no further discussion” on legislation to raise the debt ceiling until the Senate passes the House GOP bill, which has been labeled “dead on arrival” by Democrats. Caucus Chair Scott Perry (R-Pa.), however, softened that stance shortly after, telling CBS in an interview, “We’re not saying you can’t continue to talk, but until they’re willing to tell us what they’re willing to do, it’s hard to come to an agreement.”

On top of that, amid news that talks had paused, former President Trump reentered the debt limit conversation on Truth Social, urging Republicans not to “fold.”

“REPUBLICANS SHOULD NOT MAKE A DEAL ON THE DEBT CEILING UNLESS THEY GET EVERYTHING THEY WANT (Including the “kitchen sink”). THAT’S THE WAY THE DEMOCRATS HAVE ALWAYS DEALT WITH US. DO NOT FOLD!!!” he wrote.

Updated at 1:51 p.m.

Tags Garret Graves Joe Biden Kevin McCarthy Patrick McHenry