McCarthy says House could vote on debt ceiling deal as soon as next week

Key Points
  • House Speaker Kevin McCarthy is optimistic that congressional negotiators could reach a deal to raise or suspend the debt ceiling in time to hold the first vote on it next week.
  • The comments marked a significant shift for McCarthy, who has been warning for months that the political process was stalled, and the nation faced a very real prospect of debt default.
  • "I just believe where we were a week ago and where we are today is a much better place," said McCarthy.
Speaker of the House Kevin McCarthy, R-Calif., conducts a news conference with house and senate Republicans on the "debt crisis," on the west plaza of the U.S. Capitol on Wednesday, May 17, 2023. 
Tom Williams | Cq-roll Call, Inc. | Getty Images

WASHINGTON — House Speaker Kevin McCarthy said Thursday he is optimistic that congressional negotiators could reach a deal to raise or suspend the debt ceiling in time to hold a House vote on it next week.

"I see the path that we can come to an agreement," McCarthy told reporters in the Capitol. "And I think we have a structure now and everybody's working hard, and I mean, we're working two or three times a day, then going back, getting more numbers."

Investors have been watching Washington closely this week for any signs of progress in the monthslong debt limit standoff.

White House negotiators huddled with McCarthy's team in the Capitol complex Thursday, continuing their efforts to hammer out a deal that needs to pass the Republican majority House and the Democratic-controlled Senate ahead of a potential June 1 deadline, the soonest date the Treasury could run out of cash to pay debts already incurred.

McCarthy declined to give reporters any new details about what exactly was being discussed behind closed doors. He said, "I don't think it's productive if you go write something and then everyone who is not in the room all get mad over things."

"I just believe where we were a week ago and where we are today is a much better place, because we've got the right people in the room discussing it in a very professional manner, with all the knowledge, all the background from all the different leaders," McCarthy added.

The comments amount to a remarkable shift in tone from the Republican House speaker, who until now has sounded more pessimistic than either the White House or congressional Democrats about the odds of a compromise that could win the support of his fractious caucus.

McCarthy's newfound optimism came after a key meeting at the White House on Tuesday, after which President Joe Biden dispatched two of his most trusted negotiators to launch a new round of talks: Presidential counselor Steve Ricchetti and Office of Management and Budget Director Shalanda Young.

Leading the talks on the Republican side is Louisiana Rep. Garret Graves, who worked as a committee staffer in the House and Senate before being elected to office in his own right.

Like Graves, Young also worked as a House staffer for many years. Together, they bring to the talks a first-hand knowledge of how to move complex legislation through the lower chamber.

Setting aside partisan rhetoric, McCarthy took time to praise on the White House team Thursday.

"I have the greatest respect for Shalanda and for Ricchetti. They are exceptionally, smart, tough, they are strong in their beliefs on the Democratic side, just as who we have in the room," he told reporters in the Capitol's Statuary Hall.

"They're working through it in a very professional manner, seeing where we can be able to raise the debt ceiling, taking concerns of what the House has, and others, and put a bill together that will become law," said McCarthy.

The House and Senate both kept their original plans to leave for the weekend on Thursday, a sign that the steady progress of talks was raising confidence among congressional leaders about an eventual deal.

The Senate is not scheduled to be back session until the last few days of May. But Senate Majority Leader Chuck Schumer, D-N.Y., advised members to be ready to return to the Capitol with 24 hours notice.

While McCarthy's apparent turnaround was welcome news for jittery markets, it set off warning bells for congressional Democrats.

Members of the president's own party have become increasingly worried this week that Biden is giving House Republicans the upper hand, despite the fact that Democrats control both the White House and the Senate.

House Democratic Leader Hakeem Jeffries of New York warned that a key Republican demand Biden has said he is open to — stricter work requirements for some federal assistance programs — was a "nonstarter, period, full stop" for House Democrats.

In the Senate, meanwhile, a group of 11 Democrats sent Biden a letter Thursday, urging the president to keep open the option of invoking the 14th Amendment.

The amendment states in part that "the validity of the public debt of the United States ... shall not be questioned."

But the legal theory that the president can simply ignore the debt ceiling by citing the Constitution's requirement that the country pay its bills has not been tested in court.

Earlier this month, Biden said he had considered the 14th Amendment, but concluded that it would not prevent a default.

The growing frustration some Senate Democrats feel over the direction of the talks was on view at a Thursday press conference with some of the senators who signed the letter.

Senator Bernie Sanders, an independent from Vermont, from left, Senator Ed Markey, a Democrat from Massachusetts, Senator John Fetterman, a Democrat from Pennsylvania, Senator Peter Welch, a Democrat from Vermont, and Senator Jeff Merkley, a Democrat from Oregon, during a news conference at the US Capitol in Washington, DC, US, on Thursday, May 18, 2023.
Al Drago | Bloomberg | Getty Images

"If the bottom line is that the only deal to be had, that McCarthy will sign on to, is one in which ordinary families are savaged and in which the economy is flooded with fossil fuels, that is unacceptable," said Sen. Jeff Merkley of Oregon.

Sen. Bernie Sanders, I-Vt., who spearheaded the letter, complained that Senate Democrats were being kept in the dark about what was going on in the talks. He implied that Biden was caving on his long standing demand that House Republicans pass a debt ceiling hike with no strings attached.

"None of us are aware of exactly what is happening" in the talks, said Sanders. "I think what the president has insisted from day one is that there be a clean debt ceiling approach. And I think we all support that."

Asked whether he had communicated his concerns to the White House, Sanders replied, "Yeah," and refused to say more.

"It was a private conversation," he added.

Correction: McCarthy spoke about the debt ceiling deal Thursday. An earlier version misstated when he spoke. Garret Graves is a representative from Louisiana. An earlier version misspelled his name.