President Biden and top congressional leaders postponed a second meeting on the debt crisis on Thursday to give staffers more time to examine a budget deal before the two sides meet again.
People familiar with the decision called the move a positive development. Preliminary budget talks between senior White House officials and congressional aides have been going on for two days, with both sides trying to negotiate an agreement on lifting the government’s debt limit and avoiding bankruptcy.
Mr Biden and the four top congressional leaders, including Chairman Kevin McCarthy, were originally scheduled to meet again on Friday after an initial face-to-face session on Tuesday failed to produce an agreement. Another meeting is expected next week before Mr Biden leaves for Japan on Wednesday to attend the meeting of the Group of 7 leaders.
The delay seems to indicate progress at a crucial time. Until now, both sides seemed to be delving into their respective positions on what it would take to raise the country’s debt limit, which is the maximum amount of money the United States can borrow. That $31.4 trillion limit was reached on Jan. 19, and the Treasury Department has used accounting maneuvers to keep paying America’s bills without breaching that debt ceiling.
Mr. McCarthy has pushed for sweeping budget cuts and the rollback of Mr. Biden’s clean energy agenda as a precondition for raising the debt limit. Mr Biden has pushed for Republicans to raise the borrowing ceiling, arguing that it simply allows the United States to pay bills that Congress has already approved.
House Republicans who have been pressuring the White House and Senate Democrats to negotiate said Thursday that the opening of discussions on spending limits and other proposals sparked some optimism that a deal could be reached before June 1.
“The past 48 hours have given us a little more reason for hope,” said Representative Dusty Johnson, a South Dakota Republican and the leader of the Main Street Caucus, an influential group of mainstream conservatives.
Yet downplayed Mr. McCarthy entered the negotiating sessions, saying that with a June 1 deadline looming for a possible bankruptcy, the pace was not fast enough.
“We have a short window of time,” Mr McCarthy told reporters on Thursday. “If these were staff meetings to take place on February 1, I would call them productive. Sitting here with a few, 15 days to go, it really seems to me that the president finally felt the pressure to not meet with me for 100 days.
In the aftermath of Tuesday’s White House session, representatives from the Biden administration and congressional leaders have met in closed meetings on Capitol Hill to exchange ideas on a possible spending and policy deal.
Congressional officials said it made sense to postpone the higher-level meeting since Mr. Biden and congressional leaders would have little news to discuss so soon after their final discussion. One of the concerns was that another meeting with little progress to report would cast doubt on Washington’s ability to avoid an economically devastating default.
Both sides continued to talk this week and people familiar with the discussion, which lasted about two hours each Wednesday and Thursday, said a number of broad areas of negotiation had emerged, including firm limits on federal spending, recovering unused resources earmarked for the Covid emergency. , stricter job requirements for federal benefits, and faster permitting rules for energy projects.
The negotiations between the Biden administration and congressional staffers, which Mr. Biden and Mr. McCarthy announced after Tuesday’s first meeting at the White House, represent a new frontier in discussions about raising the debt limit. The talks are, in effect, an early version of the annual budget talks, which usually flare up in late summer. Given Mr Biden’s promise not to negotiate an increase in the debt limit, government officials have gone to the trouble of describing this as business as usual.
“That’s the normal order,” White House spokeswoman Karine Jean-Pierre said of the meetings Thursday. “That’s something that’s been done year after year to talk about credits.”
But the timing of the talks — and the fact that any deal they reach would almost certainly be included in a bipartisan bill to raise the debt limit in anticipation of a possible default as early as next month — suggests that Biden is negotiating the debt limit. despite the emphasis that the two issues are separate.
The White House has sent staffers from the Office of Management and Budget and the National Economic Council to the talks, and the offices of the top two Democratic and Republican congressional leaders have sent aides with experience in fiscal policy and cutting major spending deals.
For starters, government officials have rejected any deal with Mr. McCarthy that reverses Mr. Biden’s signature legislative achievements, particularly on climate change. They are urging Republicans to drop key provisions in the debt limit bill passed by the House last month, including the repeal of most of Mr Biden’s new clean energy tax breaks.
On the narrower issue of discretionary spending levels, state officials are pushing for significantly smaller cuts than the Republicans approved last month. They want shorter-term spending limits than the 10-year limits in the Republican bill. And they want to base those limits on a higher level of spending than the Republicans — the amount in this year’s funding bill, which Mr. Biden signed into law in December. The Republicans’ plan caps spending growth from fiscal year 2022.
White House negotiators have also urged not to consider Republican efforts to cut funding for the Internal Revenue Service to tackle tax fraud, as well as job requirements for Medicaid and food stamp recipients.
The duration of a debt limit increase is also emerging as a line in the sand, with the White House pushing for a higher increase than the Republicans have proposed. Both sides could agree to raise the limit for just a few months to complete budget negotiations. But Mr Biden’s aides want to avoid such a short-term solution and do not want to conduct an entirely new round of negotiations next year. As a result, any larger budget deal would likely have to increase the funding needs limit after the next presidential election, rather than early next year, as the Republican bill did.
Republicans acknowledge that the White House has drawn numerous red lines, but say the president will have to concede in some areas to reach an agreement.
“None of us, none of us in this room, think Joe Biden is going to get everything he wants in this deal,” Johnson said. “That means that by definition he will have to accept some things that he says he refuses.”
“We’re not going to negotiate with ourselves,” said Rep. Garret Graves, a Louisiana Republican assigned by Mr. McCarthy to push Republicans through the debt-ceiling confrontation. “We will have significant savings going forward.”
Biden administration officials are also open to making a deal with Republicans about expediting permits for a wide variety of energy projects, including wind, oil, gas and solar — a top priority for Senator Joe Manchin III, Democrat of West Virginia.
Any final agreement would require the approval of both Mr Biden, Mr McCarthy and Senate Democrats, and the final approval would most likely require bipartisan approval, as many of the House’s far-right conservatives favored the increase. of the House debt limit, said they would. support nothing less than what the House has passed.
Officials also hope a final deal could gain corporate group approval, putting pressure on Republicans. Such concerns prompted U.S. Chamber of Commerce officials this month outline possible paths to a debt limit agreement.