Debt talks resume after a snag as the country gets closer to a possible default
WASHINGTON, D.C. and HIROSHIMA, Japan — As debt negotiations between the White House and House Speaker Kevin McCarthy's team drew to a close Friday evening, uncertainty remained as to whether the players could reach a deal to avoid an unprecedented default.
The talks resumed after a temporary stalemate Friday afternoon.
President Biden, who is attending the G-7 summit in Hiroshima, Japan, told reporters on Saturday that he's "not at all" concerned about the state of talks.
"I still believe we'll be able to avoid a default, and we'll get something decent done," Biden said.
Republican Louisiana Rep. Garret Graves, whom McCarthy tapped to lead the talks along with other senior staff, told reporters that Friday night's meeting "wasn't a negotiation" but a "candid discussion about realistic numbers, a realistic path forward, and something that truly changes the trajectory of this country's spending and debt problem."
Graves told reporters on Capitol Hill on Friday that the team "reengaged" at McCarthy's direction.
McCarthy has previously signaled that negotiators would need a framework by this weekend in order to pass a deal in both chambers of Congress before June 1, the date at which Treasury Secretary Janet Yellen says the U.S. could run out of cash to pay its bills.
But Republican North Carolina Rep. Patrick McHenry, a key McCarthy ally who has been part of these talks, did not sound optimistic.
"No," McHenry responded when asked if he left the evening's talks more confident.
Biden's optimistic comments came after the White House issued a lengthy statement implying that Republicans were not negotiating in good faith.
White House communications director Ben LaBolt cast the talks in a harsh light, accusing Republicans of "taking the economy hostage and pushing us to the brink of default." There is a path forward, the statement said, "But President Biden will not accept a wishlist of extreme MAGA priorities that would punish the middle class and neediest Americans and set our economic progress back."
Earlier optimism hit a speed bump
The talks hit a snag earlier on Friday.
"We took a pause because of frustration — this White House will not acknowledge they are spending too much," McCarthy told Fox Business Friday evening.
The negotiations faltered while President Biden is in Japan for the G-7 summit.
Biden's top national security aide, Jake Sullivan, said other leaders of the G-7 were "keenly interested" in debt ceiling talks but that Biden had assured them he thinks an agreement can be reached. "This is not generating alarm, or a kind of vibration in the room," Sullivan told reporters in Hiroshima.
Biden previously said he would be "in constant contact" with aides while in Japan and would stay in touch with McCarthy and other leaders as well. He also announced he would cut his trip short to finish talks; he returns on Sunday.
Work requirements have been a sticking point
A White House official, who spoke on the condition of anonymity about these closed-door negotiations, told NPR the negotiators took a pause Friday afternoon and said both sides have to negotiate in good faith and recognize they won't get everything they want.
"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.
For months, Biden said he would only sign a "clean" debt limit bill — one that solely lifts the nation's borrowing limit without addressing spending. House Republicans continue to insist that any deal that raises the debt limit must also include spending cuts.
One central demand from McCarthy is for a deal to include new work requirements for adults without dependents who receive support from safety net programs. It's an area some Democratic lawmakers are worried Biden will agree to in order to avoid default.
Asked earlier whether he would accept new work requirements for some programs, Biden reiterated that he would not accept any that impact Medicaid – or, for other programs, cuts that go substantially beyond what currently exist.
NPR White House correspondents Tamara Keith contributed to this report.