Negotiations between the White House and House Republicans on the debt limit have hit a roadblock, experiencing multiple stops and starts at the US Capitol. The discussions are crucial in order to avoid a potentially disastrous federal default, as the Biden administration seeks a deal with Republicans led by House Speaker Kevin McCarthy. The country’s borrowing limit, currently at $31 trillion, must be raised by June 1 to ensure the nation can meet its financial obligations. Republicans are demanding significant spending cuts, while Democrats oppose such measures.
Earlier in the day, talks abruptly halted when McCarthy called for a “pause” in negotiations. However, the negotiating teams reconvened in the evening only to quickly end the session for the night. President Biden, who was attending the Group of Seven summit in Japan, did not make an immediate public comment. Nonetheless, White House press secretary Karine Jean-Pierre expressed the president’s optimism about reaching a deal while acknowledging the serious differences between the parties.
Top Republican negotiators for McCarthy expressed uncertainty about the next steps after the evening session but indicated that discussions are likely to resume over the weekend. The White House expressed optimism publicly, emphasizing the importance of negotiating in “good faith” to reach a resolution. Republican Representative Garret Graves, a key figure in the negotiations, described a candid discussion about the current situation and reasonable expectations. However, Representative Patrick McHenry admitted he was not confident in reaching an agreement with the White House on budget issues.
As the White House team left the nighttime session, counselor to the president Steve Ricchetti, who leads the talks for the Democrats, expressed hope and stated that they would continue working toward a solution. President Biden had already planned to cut short his trip and return to Washington on Sunday night.
Earlier in the day, McCarthy stated that the resolution to the standoff would be “easy” if the White House agreed to the spending cuts demanded by Republicans. The main sticking point was the top-line budget amount for fiscal year 2024. Democrats strongly oppose the substantial reductions proposed by Republicans, arguing that they could harm Americans. Democrats are insisting on tax hikes on the wealthy in addition to spending cuts to address the deficit.
White House communications director Ben LaBolt emphasized that any serious budget negotiation must consider both spending and revenues, but Republicans have refused to discuss revenue. He added that President Biden would not accept extreme priorities that would adversely affect the middle class and impede economic progress.
Although negotiations over a budget deal are linked to raising the debt ceiling, Jean-Pierre clarified that raising the debt limit is non-negotiable. The sudden halt in negotiations caused Wall Street to turn lower, as experts have warned that even the threat of a debt default could trigger a recession.
Republicans argue for controlling the nation’s deficit spending by rolling back spending to fiscal year 2022 levels and restraining future growth. On the other hand, Biden’s team counters that the proposed caps would result in significant reductions in some programs, which Democrats consider harmful. Democrats are also pushing for tax hikes on the wealthy to address the deficit.
Any deal would require the support of both Republicans and Democrats in the divided Congress. Negotiators are considering a narrower budget cap deal for a few years instead of the decade-long caps initially proposed by Republicans. Additionally, discussions are ongoing regarding policy changes such as energy project development reforms and the Republican push for work requirements on government aid recipients.
House Speaker McCarthy faces pressure from the conservative House Freedom Caucus to secure the best possible deal for Republicans. Failure to deliver could jeopardize his leadership. Many House Republicans are unlikely to accept any deal with the White House. Democrats, meanwhile, are skeptical of conceding too much to Republicans, fearing that it could undermine their support in Congress.
President Biden is also facing increased push back
SOURCE: Ref – france24
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