Loan talks stop six days before the default deadline

“Here we are overnight. And the pressure is high. And the consequences are high. We recognize that. We know this, and the White House will certainly approve it,” he said.

There are signs that House Republicans and the White House are making real progress. A source familiar with the talks told POLITICO late Thursday that the two sides had finalized the spending portion of the discussions.

Conservative Republicans also floated a list that Republicans familiar with the matter said came from leadership, which the two sides apparently found agreement on. These include: an agreement to raise the debt ceiling through 2024, a mechanism to encourage Congress to pass all 12 spending bills, and a plan to refund unspent Covid money.

But as the old Capitol Hill adage goes: Nothing can be agreed until everything is agreed. A second Republican familiar with the negotiations cautioned Thursday night that negotiators had not reached an agreement on top-tax spending numbers or how long the debt ceiling extension would last. They warned that there could be no agreement until other details were fully resolved.

But those leaks have fueled heartburn from McCarthy’s conservative side, threatening to shatter the unity Republicans have portrayed since passing their own debt plan. McCarthy, however, downplayed criticism from the right, saying they “don’t know what’s in the deal.”

“I’m not worried about anybody making any comments right now,” McCarthy said Friday.

And McHenry warned that detail leaks could hinder negotiators’ ability to lock down a deal.

“The tweets, the content, the details and all of these, the leaks, will not help us get a deal that will change the course of the country,” he said.

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But even as the country nears a June 1 deadline that Treasury Secretary Janet Yellen has warned puts the country at risk of default, both sides generally agree they are making progress.

McCarthy told reporters Friday, “We made progress last night. We have to make more progress now.” He and Rep. Garrett Graves (R-La.), the lead GOP negotiator, also held a powwow earlier Friday on a shared bike ride.

“We’re going to work as hard as we can to get this done, make more progress today and get the job done,” McCarthy said.

But work requirements and permit reforms remain two major sticking points. The White House, according to a person familiar with the matter, “continues to push against measures they worry will push Americans into poverty or take away their health care.” But McCarthy accused Democrats of wanting to pay “non-dependents” to stay home.

“Sometimes, we have disagreements,” McCarthy said.

Once negotiators reach an agreement, lawmakers expect it to take a day or two to turn it into legislative text. Republicans have promised to wait 72 hours — if it’s finalized before any vote — to win the speakership, part of the deal McCarthy struck with conservatives.

In that scenario, negotiators would have to reach a deal on Friday or Saturday to move the bill through the House before the earliest possible default date on Thursday.

And then there’s the Senate. No one expected the House to pass the bill unanimously – Especially after Sen. Mike Lee (R-Utah) is committed to slowing the process — meaning it could take days for the upper chamber to pass the legislation before it heads to President Joe Biden’s desk. If June 1 is the actual default date, Yellen could provide additional guidance next week, which could be the biggest problem.

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Sen. Chris Koons (D-Del.) hopes all Democrats can support the legislation that emerges from the negotiations on Thursday, but he’s not sure.

“It depends on what’s in it. It’s rare that we get every vote on absolutely everything. But it has to be something that you believe in our president,” he said.

Sarah Ferris, Jennifer Haberkorn and Catherine Tully-McManus contributed to this report.

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