Debt ceiling talks enter crunch time as negotiators get closer to a deal

Debt ceiling talks enter crunch time as negotiators get closer to a deal

Rep. Garret Graves, R-La., left, and Rep. Patrick McHenry, R-N.C., speak to reporters about debt ceiling negotiations as they leave the House Republicans’ caucus meeting at the Capitol Hill Club in Washington, May 23, 2023.

Bill Clark | Cq-roll Call, Inc. | Getty Images

WASHINGTON — Urgent talks to raise the U.S. debt ceiling appeared to move closer to a deal Thursday, with only seven days to go before the United States faces an imminent threat of debt default.

But negotiators warned that the final phase of talks would likely be the most delicate and difficult for both sides.

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“We’re at a sensitive phase, with sensitive issues that remain. Those sensitive issues are the thorniest issues that we’ve been discussing,” Republican negotiator Rep. Patrick McHenry, of North Carolina, told reporters at the Capitol on Thursday. “Everybody’s trying to do a fine job of figuring out the finer details of this, but nothing’s done.”

McHenry said that no face-to-face meetings with the White House negotiating team had been planned for Thursday but that he did not view this as a sign that talks had stalled.

“They’ve got work in the White House, we have work here in the Capitol. I don’t know about us physically being together, but there’s alignment on the set of things that we need to work on,” said McHenry.

Read more: What Republicans want in exchange for raising the debt limit

At the White House, President Joe Biden sounded a cautiously optimistic note. “The only way to move forward is with a bipartisan agreement, and I believe we’ll come to an agreement that allows us to move forward and protects the hardworking Americans of this country,” he said Thursday.

House Speaker Kevin McCarthy, R-Calif., said he did not know if a deal would be reached Thursday.

“We’ve already talked to the White House today, we’ll continue to work,” he said after the House finished their last vote of the week and prepared to leave town. “They’re working on numbers, we’re working on numbers and we’ll work together.”

One influential Republican said he was optimistic about reaching a deal before the holiday weekend. Rep. Kevin Hern, of Oklahoma, who chairs the 156-member Republican Study Committee, said Thursday that he believed it was “likely” a deal would be reached by Friday afternoon.

“We are inching closer to a deal. I think it’s some of the finer points they are working on right now,” Hern told Reuters. “You are likely to see a deal by tomorrow afternoon.”

Fitch warns about U.S. credit rating

Thursday’s talks were imbued with a fresh sense of urgency after the Fitch credit rating agency announced late Wednesday that it was placing the United States’ triple-A status on “rating watch negative.”

The agency also strongly implied that if Congress could not reach a deal before the Treasury Department’s June 1 deadline to raise or suspend the debt limit, Fitch would downgrade America’s credit rating.

Another sign that a deal may be near was a set of additional demands on McCarthy from the most conservative bloc of House Republicans, something GOP leadership had been expecting whenever the talks moved close to a compromise.

On Thursday, 35 of McCarthy’s most vocal critics in the House GOP released a letter urging the speaker to abandon the current talks and issue a new slate of much more polarizing demands.

The House Freedom Caucus members urged McCarthy to use the threat of an unprecedented debt default as leverage to force the White House to agree to a short-term debt ceiling extension through June, and to use the additional time to secure more concessions from the White House, including a border and immigration bill, and to mount a campaign to discredit Treasury Secretary Janet Yellen.

The letter offered no indication of how any of these propositions could pass the Democratic-controlled Senate, a necessary step to becoming law.

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But it wasn’t just Republicans who showed signs of internal strife this week.

House Democrats have grown increasingly critical of the White House’s apparent choice not to divulge details of the talks on a regular basis.

As a tactic, it stands in stark contrast to McCarthy’s full-court PR press of chatting with journalists several times a day and appearing on TV nearly daily.

The White House has sought to deflect the criticism and says Biden has been speaking about the debt ceiling for months.

“We’ve been very clear for the past five months,” White House press secretary Karine Jean-Pierre said earlier this week. “I wouldn’t just look at the last couple of days. The past five months, consistently, you’ve heard from this president.”

On Thursday, White House chief of staff Jeff Zients issued a rare tweet on the debt ceiling.

“Even now, Republicans want to add $3.5 trillion to the debt by extending the Trump tax giveaways for the wealthy,” he wrote. What Zients didn’t say is that Biden also wants to extend those cuts, but only for households making less than $400,000, and offset the cost by raising other taxes.

Shortly after Zients’ tweet, Biden made a point of addressing the debt ceiling talks at the White House, although he still revealed little about where they stood.