US debt ceiling clock ticks as negotiators eye deal

Negotiators for President Joe Biden and House Speaker Kevin McCarthy appeared to be closing in on a debt limit deal heading into the holiday weekend, as they continued talks with a possible default just days away, while lawmakers left town for recess.

“We know it’s a crunch time,” McCarthy told reporters on Friday.

With the deal that began to emerge on Thursday, both Biden and McCarthy would save face, in true Washington style. While Biden could protect the bulk of his legislative achievements, McCarthy could still tout that he used the debt limit to cut spending. And Americans could avoid a costly and unprecedented default.

The two sides are reportedly considering a two year-debt limit increase – hiking the debt ceiling through the 2024 election – paired with spending limits during that time. While the caps would apply differently to defense and veteran programs, other government programs would come under the limits, according to the reports, while money may be shifted from clawed-back funding for the IRS. Meanwhile, the negotiators were still reportedly at odds over some provisions, including work requirements for federal aid programs and some elements of permitting reform.

But even before the deal’s finalization, it was already beginning to stir frustrations from both sides of the aisle.

Conservative members of McCarthy’s conference urged the California Republican to “hold the line” on Thursday, reiterating their support for the provisions within the House-passed legislation last month, while tacking on new demands.

That bill, which would raise the debt ceiling while imposing spending cuts, including to some of Biden’s key legislative achievements, is a nonstarter for Democrats. But the group of hard-right Republicans, who gained new power during McCarthy’s speakership battle, have made clear that the legislation is their floor – not their ceiling.

Russ Vought, a former Trump White House budget director who’s been advising House Republicans on the debt limit, said on Friday that the components of the possible deal are far from what House Republicans approved last month, saying that the Republican negotiators “completely caved.”

I’m absolutely amazed at how bad the parameters of the deal are that are emerging,” Vought toldC-SPAN. “It’s basically almost worse than a clean debt limit.”

US NEWS