US Debt Limit Talks Stall as McCarthy Accuses White House of Backtracking
House Speaker Kevin McCarthy has accused the White House of backtracking on talks regarding raising the US debt limit. McCarthy does not expect any progress until President Joe Biden returns to the US from the Group of Seven (G7) summit in Japan.
Republicans vs. White House: Differences over Spending Cuts
Republicans and the White House are disputing over spending cuts. GOP lawmakers are demanding spending cuts as a condition for raising the federal borrowing limit. Lawmakers from both parties have stepped up their attacks on each other as talks have stalled – despite showing signs of progress earlier in the week. For a deal to succeed, spending cuts must be significant enough to pacify conservative Republicans, who have backed McCarthy’s speakership on the condition that he extract serious spending reforms without raising taxes or slashing military spending and veterans’ benefits.
Palatable to Democrats
Apart from satisfying the Republicans, the White House must also prepare a plan palatable to the Democrats, who hold a Senate majority, and will likely require providing support between 50 and 100 votes in the House. Few in President Biden’s party want to see domestic programs cut, especially without corresponding cuts to the Pentagon budget or the closing of tax loopholes used by the wealthy and large corporations.
White House Accuses Republicans of Negotiating in Bad Faith
McCarthy’s remarks confirmed a renewed shift in tone to mutual recrimination after the White House accused Republicans of negotiating in bad faith. The clock is ticking with Treasury Secretary Janet Yellen having said the US could lose its ability to pay all its bills by June 1.
The desire to wait for Biden may be informed by a Republican belief that the president will ultimately decide to sacrifice progressive priorities to defuse the biggest threat to the economy ahead of his reelection campaign. The president has already de-facto retreated from his pledge not to negotiate over raising the debt ceiling.
The debt-limit fight, which could trigger a first-ever US payments default, threatens to inflict pain on the global economy. It has shadowed Biden’s overseas trip, and the president previously decided to cut his travels short to return to Washington for the final stage of the negotiation. A Republican walk-out of talks on Friday in Washington shattered hopes that negotiators were nearing a deal to raise the borrowing cap, sending stocks plunging.
Biden’s Return & the Senate
Biden is expected to return to Washington late Sunday. The Senate has left Washington for their Memorial Day recess, but senators have been instructed to be ready to return on a 24-hour notice if needed.
House Speaker Kevin McCarthy accused the White House of backtracking in talks on raising the US debt limit. Differences over spending cuts continue to hamper the negotiation process, depleting any prospects for progress until President Biden returns to the US. The debate on the debt limit fight threatens to inflict global economic pain and create the first-ever US payments default. With a Republican walk-out of talks and a limited timeframe, the negotiation process may prove to be a tumultuous journey.
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