Debt limit talks broke down again on Tuesday as negotiators described disagreements over spending levels and other policy add-ons as too far of a gap to bridge.
Rep. Garret Graves, one of Speaker Kevin McCarthy’s proxies in the negotiations, said Tuesday night that no additional White House negotiations meetings are scheduled but that Republicans are willing to meet if something new is discussed.
“There is a significant gap between where we are and where they are financially,” said the Louisiana Republican, noting that the White House has not presented any proposals to bridge the gap.
Graves refers to a disagreement over spending limits. Republicans want to cut spending in fiscal 2024 to the level of fiscal 2022, or at least below the current year, and cap annual growth at 1 percent for many years to come.
[‘Pause’ lifted, debt limit talks back on]
Democrats have offered to freeze spending at the fiscal 2023 level — though the parties disagree about what baseline to use for the freeze — and are unwilling to agree on more than two years. spending cap.
Republicans say that’s not enough.
“The speaker made it clear to us, it’s not just a ‘Hey, we want to have a sugar high for a year in terms of spending cuts.’ He wanted us to really put the country on a different path,” Graves said.
Rep. Patrick T. McHenry, another McCarthy proxy, said White House negotiators, who were “very talented people,” seemed to have a directive “from the highest levels of the White House” that they would not agree to spend less. than the current fiscal year.
“They misread the situation. And it’s very dangerous,” said the North Carolina Republican.
Graves likens White House negotiators to car salesmen. “They’ll say, ‘Well, I’ve got to talk to my manager. Well, sorry, the manager won’t lower the price but he’ll throw the mats out of the car,'” he said. “That’s not going to happen.”
The White House did not respond to a request for comment.
House Minority Leader Hakeem Jeffries, who was briefed on the talks, told reporters that Republicans have not offered any reason for a compromise that would get Democratic votes, which are needed to pass any deal.
“Republicans have taken the position that it’s my way or the highway,” the New York Democrat said.
Jeffries declined to say whether President Joe Biden’s proposal to freeze spending at the fiscal 2023 level is a floor for his party, but he said it is “an approach that truly represents finding common ground.” .”
“This is less than what President Biden asked for in his budget,” he added. “But it won’t go as far as the dramatic, draconian and devastating cuts that extreme MAGA Republicans want.”
Neither side offered any indication of how to close the gap in spending levels. McHenry said the resolution “is not something that is easily tied to a give-and-take.”
Duration is another issue
Republicans say even the duration of the debt limit increase has not been agreed upon. Graves said GOP negotiators “didn’t move” the House-passed bill, which provides for a $1.5 trillion increase in the debt limit or suspension until March 31, whichever is earlier.
Democrats are seeking a two-year increase in the debt limit to ensure that Biden and Congress don’t have to renegotiate it before the 2024 election.
“That’s a point of separation between the House and the White House right now,” Graves said.
McHenry said disagreements over Republicans’ desire to expand work requirements for recipients enrolled in programs such as the Supplemental Nutrition Assistance Program and Temporary Assistance for Needy Families have also not been resolved.
“We think it’s a fundamental part of any deal that gets done and this White House is fighting us on the job requirements,” he said.
Another disagreement is about revenues. Democrats say if Republicans want significant deficit reduction it won’t come from spending cuts alone, but Republicans have ruled out tax increases.
Jeffries said it was “reasonable” that Biden offered ideas for raising more revenue, such as revisiting the 2017 tax cut law that only Republicans voted for, as well as “wasteful subsidies of Big Oil and Big Pharma.”
Republicans rejected all those ideas, Jeffries said. “That’s an effort to take this country on a reckless legislative joy ride into a dangerous default,” he said.
Democratic sources familiar with the negotiations said their party was putting these ideas on the table because Republicans thought they were getting their own “signature victory,” such as relaxing the rules. for oil and gas projects and expanded work requirements for low-income benefit programs, which do not provide. Democrats are something of equal value in return.
If Republicans drop their partisan demands and focus on policy issues where both parties have interests, Democrats will do the same, these sources said.
Graves said any final deal would include the priorities of the Biden administration but a win for the White House would be to raise the debt limit by more than a few months.
“We are willing to give them an increase in the debt ceiling,” he said. “That’s what they get. And as you know, the president introduced a longer timeline or duration.
Democrats say lifting the debt limit is not a sure win for their side, when everyone agrees the consequences of not doing so would be catastrophic.
“The House Republicans have taken the position that the only thing they are willing to give up is to avoid a default,” Jeffries said. “Avoiding a default is not a Democratic issue or a Republican issue; it’s an American issue. America must always pay our bills.”
Graves said he doesn’t see negotiators meeting again until one side has something new to offer.
“If we go back and just continue the same discussion, then the answer is no,” he said. “I suspect they’ve gone back to their corner … trying to be innovative and trying to come up with new ideas. I mean, that’s what we do.”
For example, Graves said one way to bridge the gap between a White House push to raise revenue as part of a deal and Republican opposition to tax increases is to include provisions to -oil and gas leases from a House GOP energy package. The bill passed the House with support from four Democrats.
Graves declined to provide specifics on the areas where negotiators found agreement but said they were making progress in some categories.
There is no deadline wiggle room
Graves and McHenry each said they view June 1 as a tough deadline for addressing the debt limit failure. Treasury Secretary Janet L. Yellen told lawmakers that the government will likely run out of funds to pay all of its bills in time for early June and June 1.
“He’s got a lot of experience and he’s a straight shooter … so I don’t think there’s any wiggle room for us,” McHenry said.
He also ruled out a short bridge to allow a deal to reach Biden’s desk, saying there are technical challenges that limit the viability of a short patch.
But some Republicans are increasingly dismissive of the June 1 date and believe Yellen will find more breathing room.
“If Yellen thinks we need some … cash, I’ll tell you what, there’s $50 billion in unobligated COVID money,” said Rep. Chip Roy, R-Texas. “Why don’t you take that to help you with any issues you have?”
With time short and the House scheduled to leave Washington for a Memorial Day recess next week, Graves said he expects House members to be called back to town to pass a deal. .
“If I’m looking into a crystal ball right now, I’m going to encourage members to go home on Thursday when we’re done, but also tell them you’ll be back,” Graves said.
Avery Roe contributed to this report.
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