House Speaker Kevin McCarthy of Calif., speaks to reporters about debt limit negotiations, Wednesday, May 24, 2023, on Capitol Hill in Washington. (Graeme Jennings / Washington Examiner)

Debt ceiling talks: Here’s where things stand less than one week before default deadline

Cami Mondeaux May 26, 08:29 AMMay 26, 08:29 AM Video Embed

The House is on recess, and Republican negotiators left the Capitol late Thursday night without a finalized deal on the debt ceiling. Still, several officials have indicated they’re closing in on a deal, expressing optimism they can get something worked out before the default deadline in six days.

White House negotiators have been working with Republicans for over a week to iron out a deal as both parties have dug in their heels and refuse to budge on their top priorities. But it appears officials are close to an agreement that satisfies some Democratic demands, as well as some GOP requirements, according to leaked details that made their way through the halls of the Capitol on Thursday.

WHITE HOUSE NOT BUDGING ON WORK REQUIREMENTS, CAUSING AN IMPASSE IN NEGOTIATIONS

However, it’s not yet clear whether such a deal will win the support of rank-and-file lawmakers, as both Democrats and Republicans have expressed opposition to some of the provisions, threatening to vote against legislation they don’t agree with.

With just six days until the Treasury’s “X-date,” the earliest the United States could no longer be able to pay off its debts, here’s where things stand on the debt ceiling talks:

Negotiators craft deal to raise debt ceiling and cut spending

Leaked details of the proposed debt limit agreement show negotiators working to satisfy Democratic demands to raise the debt ceiling while also meeting the GOP’s desire to cut discretionary spending and implement budget cuts. As part of the deal, lawmakers would lift the debt ceiling for the next two years while keeping defense spending at the levels proposed by President Joe Biden in his fiscal 2024 budget earlier this year.

In doing so, the deal would allow Republicans to say they reduced some federal spending, and Democrats can say they salvaged key domestic programs, such as military and veterans’ benefits, from experiencing drastic cuts.

The final deal is also expected to include incentives for lawmakers to pass all 12 of its annual spending bills by the end of the year.

Sticking points remain

Despite the “great progress” touted by House Speaker Kevin McCarthy (R-CA) this week, there remain a few sticking points that have prevented negotiators from shaking hands on a final deal.

Among the holdout matters include permitting reforms and work requirements for welfare programs, which McCarthy has indicated is a redline issue for him in the negotiations. It’s not clear what other provisions remain under discussion, and McCarthy declined to share further details as he left the Capitol on Thursday.

“We’ve been talking to the White House all day. We’ve been going back and forth, and it’s not easy,” McCarthy told reporters. “It takes a while to make it happen, and we are working hard to make it happen.”

Rep. Garret Graves (R-LA), one of McCarthy’s top negotiators, said the White House was unwilling to move on work requirements, causing a major hang-up in talks. The work requirements House Republicans are trying to put in the debt ceiling bill would apply only to able-bodied adults with no dependents and is a nonstarter in any compromise with the White House to raise the debt limit.

Rank-and-file lawmakers unhappy with details

Getting a deal finalized is only the first step in the legislative battle, as party leaders will then need to go back to the rank and file to sell the agreement as a winning arrangement.

Several lawmakers on both sides of the aisle have already expressed their opposition to the debt ceiling deal even before the details have been finalized, with some threatening to vote against the measure if it doesn’t meet their demands.

After seeing details of the leaked debt ceiling deal on Thursday afternoon, Republicans on the House Freedom Caucus wrote a letter to McCarthy urging him to “hold the line” and not accept anything less than what was included in the speaker’s debt limit bill that was passed by the House last month. Furthermore, the group pressed McCarthy to include additional provisions in the deal, such as measures that were passed in the GOP-led border bill.

“Despite claiming he would be ‘blameless,’ President Biden is entirely responsible for any breach in the debt ceiling, period,” the caucus wrote. “Mr. Speaker, the only hope for transformative change in Washington comes from a unified House Republican Conference. You have that. We are behind you. Use our unity to make history.”

Meanwhile, Democrats have also expressed frustration with the proposed deal, especially on the matter of work requirements. Party leaders spoke with White House officials on Thursday afternoon to relay these concerns, warning they can’t assume Democrats will back any deal that Biden signs off on, according to PunchBowl News. 

With opposition on both sides, it makes it that much more difficult to get the 218 votes needed to pass legislation through the House — especially if both Democrats and Republicans threaten to withhold their support.

What comes next? 

Negotiators are hoping to finalize a deal by the end of Friday or Saturday at the latest, after which lawmakers will take one or two days to write the legislation. After that, the bill must be available for review for at least 72 hours before being considered for a vote, according to House rules.

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That means the earliest a vote could take place in the House is Wednesday, just one day before the default deadline. After that, the legislation will be passed to the Senate, where it could take a few days before it’s passed and sent to Biden’s desk for his signature.

The last-minute time crunch comes as the House broke for recess on Thursday afternoon for the holiday weekend, with some Democrats grumbling that lawmakers should stay in Washington until a deal is made. McCarthy said he would remain in Washington for the weekend to continue working on a deal.

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