Debt ceiling talks resume after Republicans trigger brief pause
- High-stakes talks on the debt ceiling resumed Friday evening, after a six-hour pause triggered by House Republican negotiators walking out of the room in frustration.
- One of the toughest sticking points in the talks has been the question of spending caps, a key GOP demand but a red line for many Democrats.
WASHINGTON — High-stakes talks over raising the debit limit resumed in the Capitol on Friday evening, hours after they were paused at midday when Republican negotiators walked out of the room, blaming the White House for holding up discussions.
"We'll be back in the room tonight," said House Speaker Kevin McCarthy on Fox Business, moments before negotiators were spotted returning to the room where talks have taken place.
"But it is very frustrating if they want to come into the room and think we're going to spend more money next year than we did this year. That's not right. And that's not going to happen," said McCarthy.
The talks lasted about two hours, breaking up for the evening around 8 p.m. ET.
One of the toughest sticking points in the talks has been the question of spending caps, a key GOP demand but a red line for a significant bloc of Democrats.
As the White House presses for a debt limit hike that would push the next deadline past the 2024 presidential election, Republicans are insisting on a spending cap for next year that goes beyond a freeze on the current top-line number and actually rolls back government spending to 2022 levels.
"Let's spend less, let's pull back the Covid money that we haven't spent ... work requirements ... let's do some permitting reform ... I think we could probably find a pretty good agreement to be able to move forward," said McCarthy, laying out the GOP's demands, in addition to the spending caps.
Holding their respective caucuses together has become more difficult this week for party leaders — not less — as opposition to any compromise has grown among blocs of conservative Republicans and progressive Democrats
Any deal to raise or suspend the debt limit will need to pass in both the GOP-led House and the Democratic-controlled Senate, and key lawmakers in both parties have acknowledged that the eventual compromise bill could be unacceptable to hardliners.
"There are real differences between the parties on budget issues and talks will be difficult," a White House spokesperson told NBC News after the negotiations broke up. "The president's team is working hard towards a reasonable bipartisan solution that can pass the House and the Senate."
The break in talks came just a day after McCarthy said he was optimistic that congressional negotiators could reach a deal in time to hold a House vote next week.
"I see the path that we can come to an agreement," the California Republican told reporters on Thursday.
President Joe Biden is in Japan this weekend for a Group of Seven summit, but he cut short his trip in order to return home on Sunday and continue negotiations.
The House and Senate both kept their original plans to leave for the weekend on Thursday. The Senate is not scheduled to be back in 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.
Investors have been watching Washington closely this week for any signs of progress in the monthslong debt ceiling standoff. Earlier this month, Treasury Secretary Janet Yellen pegged June 1 as the earliest date on which the United States could run out of money to pay debts the government has already incurred.
The date was earlier than either the White House or Wall Street had anticipated, and injected fresh urgency into talks that had been effectively stalled since February.
Following a meeting at the White House on Tuesday with congressional leaders, Biden tapped two of his closest aides to take over the talks, which had made little progress to that point.
McCarthy praised Biden's choice of presidential counselor Steve Ricchetti and Office of Management and Budget Director Shalanda Young, calling the pair "exceptionally smart."