House Speaker Kevin McCarthy told Republicans during a closed-door meeting on Tuesday that he’s not close to a bipartisan deal with President Joe Biden to avoid a first-ever default on the nation’s debt.
“We are nowhere near a deal,” McCarthy told Republicans. “I need you all to hang with me.”
As each day passes without a deal, the clock is ticking closer to a looming deadline for default – which could be catastrophic for the global economy and have financial effects on countless Americans.
Treasury Secretary Janet Yellen reaffirmed in a letter to McCarthy on Monday that it is “highly likely” that the US Treasury will not be able to pay all of its bills in full and on time as soon as June 1. But several Republicans, including House Majority Leader Steve Scalise, have suggested that they do not believe Yellen’s estimate of June 1 as the so-called X-date for potential default and called on her to testify before Congress.
Negotiations dragged on Tuesday as White House negotiators again went to Capitol Hill to meet with House Republicans. Louisiana GOP Rep. Garret Graves, McCarthy’s chief negotiator during debt ceiling talks, told CNN Tuesday afternoon that there are still large differences between both parties in negotiations.
“Look, there are some big bright red lines on both sides. We do not have any of those issues closed out. And you’ve seen some folks that have indicated that some of these issues cannot be included. I’ll tell you that that’s not what I’m operating under, and that everything’s on the table, and we’re gonna keep negotiating until there’s a deal that makes sense and meets the speaker’s parameters,” Graves said, adding that the biggest gap is a lack of general agreements on spending cuts.
While Republicans have said they want to keep as much of their debt ceiling bill intact as possible – and hold on to as many Republican members as possible – Graves acknowledged that they still have to take the Democratic-majority Senate and Democratic president into account.
McCarthy has maintained that both parties could still obtain a deal by the June 1 deadline, but he is also now accusing the president of trying to “disrupt” negotiations by bringing proposals involving Medicare and Social Security back “into the fold.” The speaker also told CNN’s Manu Raju that the only concession he will make is raising the borrowing limit, which shows that Republicans are not willing to give any more than raising the debt ceiling in exchange for their demands.
Republican Study Committee Chairman Kevin Hern said McCarthy told members during Tuesday morning’s meeting they should return to their districts if a deal isn’t reached by the White House and Republican negotiators by Memorial Day weekend. Members can always be called back, but Hern told reporters that this is a deal that has to be reached between a few key people.
“The negotiations are with the speaker and his team and the White House and their team. And so the rest of us being here, just waiting around, doesn’t do any good for anyone,” Hern said.
McCarthy’s mixed messaging about prospect of securing a deal before next month follows a meeting at the White House with Biden on Monday evening, where the speaker had underscored that both parties are united in their goal of reaching an agreement to raise the nation’s debt limit before the country defaults.
More on the debt ceiling
“I felt we had a productive discussion. We don’t have an agreement yet, but I did feel the discussion was productive in areas that we have differences of opinion,” McCarthy said outside the West Wing, adding that the “tone” of Monday’s meeting was also “better than any other time we’ve had discussions.”
Monday evening’s meeting at the White House came after negotiations hit a snag and were put on pause Friday, and representatives of each side spent most of the next two days criticizing the other while defending their own positions. But the parties appeared to smooth things over to resume negotiations when Biden and McCarthy spoke over the phone as the president was aboard Air Force One returning to Washington after a trip to Japan.
Biden, in a statement, called Monday’s discussion in the Oval Office productive while acknowledging that areas of disagreement persist.
“We reiterated once again that default is off the table and the only way to move forward is in good faith toward a bipartisan agreement,” Biden wrote. “While there are areas of disagreement, the Speaker and I, and his lead negotiators … and our staffs will continue to discuss the path forward.”
On Monday evening, McCarthy maintained that both he and the president “agree we want to be able to come to an agreement.”
McCarthy’s team and White House negotiators have been meeting daily in an effort to come to a consensus on the budget and the debt ceiling. Negotiators also met through the night on Monday and reconvened Tuesday.
The speaker on Monday also acknowledged that he does not plan to waive the House’s three-day rule – which requires that legislation be posted for at least three days to allow House members to study it before it can be voted on.
McCarthy has repeatedly warned that the White House and House GOP must reach a deal this week to avoid default. And if negotiations drag on, waiving the three-day rule could allow the legislation to pass more quickly. However, there are concerns that expediting the legislative process by waiving the rule may lead to members voting to support something they aren’t fully informed on.
The speaker said he “would give everybody 72 hours, so everybody knows what they’re voting for.”
Republicans have also accused the White House of a lack of urgency in negotiations, which White House press secretary Karine Jean-Pierre called “ridiculous.”
“Look, this is urgent, but this is not political,” Jean-Pierre told reporters during Tuesday’s White House press briefing. “This is something that we have said over and over again for the past five months, that this is for Congress to act (upon). … We’ve shown urgency from here, and, look, we think Republicans saying that the White House is not showing any urgency is a ridiculous question – a ridiculous statement for them to be making.”
Democrats and Republicans remain divided
Despite continued talks, House members on both sides of the aisle appear remain divided over the approach to debt ceiling discussions.
House Democratic Leader Hakeem Jeffries said Monday evening asserted that talks are moving in the “wrong direction.”
At a hastily called news conference on the steps of the Capitol, Jeffries attacked the GOP for rejecting a White House compromise – to freeze domestic spending at the current levels. Republicans instead want to roll back spending to previous years’ levels and write into law that spending would be capped for several years.
“They’ve rejected the fact that President Biden is willing to consider freezing spending. It will reduce the deficit by a trillion dollars. This is what the extreme MAGA Republicans say that they want. They rejected. They rejected an unwillingness to not put the country through this again,” the New York Democrat said. He also repeatedly refused to say if House Democrats would accept a spending cut, as McCarthy has demanded.
Jeffries’ position is critical because McCarthy will almost certainly need House Democratic support to pass any deal cut with the White House.
During Tuesday’s closed-door meeting with Republicans, at least one hardline member – Rep. Chip Roy of Texas – complained about Republicans seeking a compromise that water downs what they passed in the House, according to a source in the room. Roy said it’s about saving the country, not seeking a deal.
Still, a number of Republicans – even some who haven’t always backed McCarthy – said they are standing by the speaker and are happy with how he’s negotiated up until this point.
“I am very confident in Kevin McCarthy as our speaker,” Rep. Nancy Mace, a Republican from South Carolina told CNN. “I don’t want Speaker McCarthy’s job. That’s a very tough job … he’s got the five families to deal with and a caucus of one right here. He’s doing a great job of pulling people together.”
Rep. Tim Burchett, who voted against the House’s GOP debt ceiling plan said that “McCarthy is very good at deal cutting. I trust him.”
“If he says it’s going to start snowing in Knoxville tomorrow, I am running down … and buying a new sled,” Burchett added.
Although there have been frustrations expressed on both sides of the aisle about a lack of progress on a deal ahead of a potential default, Senate Minority Leader Mitch McConnell has remained optimistic about the state of talks. On Tuesday, the Kentuckian said that people should “relax” because everyone involved knows “the country will not default.”
CNN’s Alayna Treene, Manu Raju, Kirstin Wilson, Clare Foran, Haley Talbot, Morgan Rimmer and Ted Barrett contributed to this report.