President Biden and congressional leaders made little progress toward securing a deal to raise the nation’s debt limit at a crucial meeting Tuesday afternoon — though they did express some optimism about future talks between staff from the White House and Speaker Kevin McCarthy (R-Calif.).
The talks hit a roadblock before the principals arrived at the White House, with McCarthy reiterating his demand to implement stricter work requirements for the Supplemental Nutrition Assistance Program (SNAP), an idea that has run into stiff Democratic resistance.
House Democratic Leader Hakeem Jeffries (D-N.Y.) and many other Democrats dismissed the McCarthy proposal as a “nonstarter,” pointing out it would only save $11 billion over 10 years, hardly enough to make a dent in the nation’s $31.4 trillion debt.
The impasse sets the stage for a dramatic two-to-three weeks of brinkmanship before the Treasury Department finally exhausts its ability to pay the nation’s fiscal obligations on June 1. Treasury Secretary Janet Yellen said earlier Tuesday that time was running out to prevent a “catastrophic” default.
McCarthy told reporters outside the White House immediately after the meeting that the two sides remain far apart, though he voiced newfound optimism that a deal might still be reached by Friday.
He said the only progress made Tuesday was that Biden agreed to keep the talks more focused between the White House and the Speaker’s office.
“The president agreed to appoint a couple of people from his administration to sit down and negotiate directly with my team, so I found that to be productive, personally. But we’ve got a lot of work to do in a short amount of time,” he said.
McCarthy later told reporters that Biden had tapped Office of Management and Budget Director Shalanda Young and White House counselor Steve Ricchetti to lead the talks with his deputy, Rep. Garret Graves (R-La.).
The failure to achieve a breakthrough at Tuesday’s White House meeting, where Biden hosted Congress’s top four leaders, means the debt-limit standoff now moves to a more critical phase.
Senate Majority Leader Chuck Schumer (D-N.Y.) said he took away some hope from Tuesday’s meeting because he said everyone in the room agreed that a default must be avoided at all costs.
After last week’s meeting, Schumer had criticized McCarthy for refusing to take default off the table.
Schumer also softened his demand that Senate and House Republicans agree to a clean debt-limit increase. He instead highlighted the need for what he called a “bipartisan” agreement.
“The bottom line is we all came to agreement that we were going to continue discussions,” Schumer said. “Hopefully we can come to an agreement; we don’t have much time but default is just the worst, worst alternative. Having a bipartisan bill in both chambers is the only way, the only way we’re going to avoid default.
“Hakeem and I are committed to trying to get that bipartisan bill done.”
Reflecting the growing sense of urgency, the White House announced Tuesday that the president will cut short his trip to Asia and now plans return to Washington on Sunday in order to resume negotiations with Republicans as soon as possible.
Biden will depart Wednesday for a trip to Japan but will no longer make stops in Papua New Guinea and Australia before returning stateside.
Senate Republican Whip John Thune (S.D.) warned that negotiators need to have a framework hammered out by the end of this week to give leaders in the House and Senate enough time to draft legislation and get it passed in both chambers by the June deadline.
“They need to get the closers in there because time’s a-wasting. If there isn’t a deal by the end of this week, you know how long it takes to transact some of this stuff through the House and the Senate. If we really are working on a June 1 deadline, then things need to start happening fairly quickly here,” he said.
In a letter to congressional leaders Monday, Yellen doubled down on her earlier prediction that the federal government will run out of flexibility to pay its debts as early as June 1.
Schumer told reporters to “stay tuned” for news about whether he will cancel the weeklong Memorial Day recess, scheduled to begin on May 22, to keep lawmakers in Washington in case of a possible deal.
Sen. Rick Scott (R-Fla.), who has pushed Senate Republican leaders to support McCarthy more vocally in the negotiations, said Biden should cancel his Asia trip entirely.
“I think he should not leave, and he should worry about the debt limit here at home,” he said.
Lawmakers in both parties dismissed the prospect of passing a short-term extension of the debt limit to give the two sides more time to negotiate, arguing that doing so would only set up another potential crisis later in the year.
“I still think it’s a really bad idea,” Thune said of a short-term extension. “I just think the pressure needs to stay on the negotiators to get a deal …. To me, that’s not an option, and I’m not sure there would be the votes in either the House or the Senate for a short-term extension.”
Senate Budget Committee Chairman Sheldon Whitehouse (D-R.I.) warned that a short-term extension would only sow more uncertainty in the financial markets, which could then affect the broader economy.
“That rattles markets as much as anything,” he said.
The day’s talks got off to a rocky start when McCarthy told reporters early Tuesday that strengthening work requirements for food assistance for adults without dependent children would be a “red line” for him in the talks.
“When you’re talking about work requirements, remember what we’re talking about: able-bodied people with no dependents,” he said. “It’s 20 hours.”
The Congressional Budget Office estimates that establishing new work requirements for Medicaid, SNAP and Temporary Assistance for Needy Families (TANF) would save $120 billion over the next decade.
But the White House has already effectively ruled out imposing new work reporting requirements on Medicaid beneficiaries, which accounts for $109 billion in savings. The proposed reforms to SNAP and TANF would amount to only $11 billion over the next decade.
Even so, the idea received immediate pushback from Democrats.
“There are already work requirements attached to SNAP,” Senate Democratic Whip Dick Durbin (D-Ill.) said of McCarthy’s red line. “I don’t know where he wants to go. Does he want children working before they receive food stamps.
“On its face, it’s ridiculous. We have work requirements,” he said.
Durbin said the possibility of a short-term debt-limit extension to give negotiators more time hasn’t received any serious discussion in the Senate.
Rep. Pete Aguilar (Calif.), the chairman of the House Democratic Caucus, noted at a press briefing Tuesday that the average SNAP benefit is only $6 per person per day.
“That’s who Republicans are. They would rather cut that, or eliminate it, and take food out of the mouths of kids in order to make a political point,” he said.
White House press secretary Karine Jean-Pierre noted that Biden supported work requirements for food assistance decades ago.
“When you think about the work requirements, that’s something he voted for back in the 1990s, so it’s been around for some time clearly,” she said.
Sen. Thom Tillis (R-N.C.) said he was glad to hear that there would be “fewer cooks in the kitchen” and the talks would be more focused between the White House and the Speaker’s office.
Senate Democrats, however, doubt that White House officials will be able to reach any kind of deal with McCarthy, and they responded skeptically to the news that McCarthy pledged at Tuesday’s meeting that a default must be avoided.
“I do not share that optimism so long as Speaker McCarthy is one of the only people in the room and he’s still got his finger on the default detonator,” said Sen. Chris Van Hollen (D-Md.).
Al Weaver contributed.