Debt-ceiling negotiations hit a wall before weekend

WASHINGTON − Negotiations on raising the debt ceiling came to an abrupt halt Friday as Republican negotiators walked out of a closed-door meeting with White House officials, leaving the two sides at a stalemate heading into a critical weekend.

Rep. Garret Graves, R-La., who is leading negotiations for House Speaker Kevin McCarthy, told reporters it’s time to “press pause” on negotiations “because it’s just not productive.” Graves said the position of the White House became “unreasonable.”

“We’ve got to get movement by the White House and we don’t have any movement yet,” McCarthy said. “So, yeah, we’ve got to pause.”

It is unclear when talks will resume, but they could pick back up as early as Saturday.

A White House official, who spoke on the condition of anonymity, acknowledged the impasse. “There are real differences between the parties on budget issues and talks will be difficult. The president’s team is working hard towards a reasonable bipartisan solution that can pass the House and the Senate,” the official said.

The White House believes several of the top demands of Republicans, who are seeking substantial spending cuts, would not get the support needed from Democrats in Congress for passage, according to a source familiar with negotiations.

One major sticking point, according to the source, remains expanded work requirements for federal benefits such as food stamps that Republicans covet but President Joe Biden and Democrats oppose. Several Democratic lawmakers have characterized stricter work requirements for welfare as a nonstarter.

Biden is rushing to reach an agreement with Republicans to avert a government default that Treasury Secretary Janet Yellen has warned could occur as early as June 1 unless the debt ceiling is raised to allow the U.S. to continue to borrow. Biden, who is attending a G-7 summit in Japan, is set to return to Washington on Sunday.

McCarthy has said a deal needed to be reached before this weekend to leave time for the House and Senate to take action on legislation before the June 1 deadline.

Other areas discussed in negotiations includes Republican proposals for permitting reform for oil and gas projects, possible caps on future discretionary spending and rescinding unspent COVID-19 rescue funds.

Rep. Patrick McHenry, R-N.C., another Republican negotiator said, “There is a “serious gap” between the sides. “We’re in a tough spot.”

Republican-backed legislation to raise the debt ceiling in exchange for $4.8 trillion in cuts passed the GOP-controlled House last month, but is dead on arrival in the Democratic-controlled Senate. Still, the House’s action − and Republican lawmakers’ refusal to take up the debt limit without spending cuts − forced the White House to begin considering Republicans’ proposals.

The White House said Biden, while in Japan, received an update on talks Friday morning from his negotiators, Steve Ricchetti, counselor to the president, and Shalanda Young, director of the Office of Management and Budget.

Biden urged his team to “continue pressing forward for a bipartisan agreement and made clear the need to protect essential programs for hardworking Americans and the economic progress of the past two years,” the White House said.

Biden told reporters earlier this month that the standoff is “becoming an issue in other countries.” Japan and the United Kingdom, two G-7 allies, are among the foreign nations that hold the most U.S. debt. 

French ambassador to the U.S. Laurent Bili said in a Friday interview with USA TODAY that the possible default is a source of “stress” for other nations because it has a direct impact on the markets and global interest rates. “It’s a concern for the whole world,” Bili said.

Contributing: Associated Press and USA TODAY White House correspondent Francesca Chambers

Reach Joey Garrison on Twitter @joeygarrison.

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