Congress

GOP hits ‘pause’ on debt talks as clock ticks

How much to cut spending is “the major sticking point,” but it’s “not the only one,” as Rep. Dusty Johnson put it.

Rep. Dusty Johnson speaks at a microphone.

Speaker Kevin McCarthy’s lead negotiator on the debt limit said Friday he plans to “press pause” on talks with the White House, a snag that imperils both parties’ efforts to reach a default-averting deal as soon as this weekend.

One of the biggest hangups underlying the impasse is how much to cut spending — with Republicans insisting that Democrats aren’t compromising enough on the GOP’s demand to reduce spending by roughly $130 billion.

Rep. Garret Graves (R-La.), one of McCarthy’s deputies, has been meeting since early this week with President Joe Biden’s negotiators as both parties race to a fiscal deal designed to avert an economy-crushing default which could hit as soon as June 1.

“We’ve decided to press pause, because it’s just not productive,” Graves told reporters in the Capitol as he left a meeting that had begun around 10 a.m. on Friday. He was joined by House Financial Services Chair Patrick McHenry (R-N.C.).

A White House official acknowledged that a snag had occurred without indicating that either side had walked away from the table: “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.”

Republicans, though, say Democrats aren’t making big enough concessions on spending. The House GOP passed a bill that would reduce discretionary spending by about $130 billion, returning Congress’s annual budget to fiscal year 2022 levels. Democrats, though, have been resistant to go that low.

In fact, White House negotiators are signaling that they are unwilling to go below fiscal year 2023 levels, which would amount to a funding freeze, according to a person familiar with the discussions.

Rep. Dusty Johnson (R-S.D.) said in an interview that “The White House refuses to acknowledge that we have a spending problem. Republicans are asking to spend as much in 2024 as we spent just five months ago, and the White House doesn’t understand how important that is to the Republican conference.”

“Spending caps are the major sticking point, although they’re not the only one,” he added. “And I’m not at liberty to discuss exactly what the paper being traded back and forth is, but I would tell you, we’re just not seeing enough movement on spending.”

Negotiators have also been going back and forth on the politically thorny issue of work requirements for social programs, with little agreement in sight.

The two sides appear, however, to have reached a tentative agreement on Covid aid rescissions, in what represents a small breakthrough. But it’s still unclear how much will end up being clawed back, according to three people familiar with the discussions.

It’s unclear when Graves and his fellow GOP negotiators would resume talks. (Some on the Republican side are privately hopeful this pause can jumpstart talks — forcing Biden’s negotiators to take their asks more seriously.) It was expected, though, that talks would resume sometime this weekend.

The White House’s negotiators include budget chief Shalanda Young, congressional liaison Louisa Terrell and top adviser Steve Ricchetti.

Senate Minority Leader Mitch McConnell (R-Ky.) promptly tweeted backup for the House GOP perspective: “It is past time for the White House to get serious. Time is of the essence.”

Just a day earlier, McCarthy had sounded upbeat about the negotiations, suggesting that White House and Hill negotiators could finalize an agreement in the coming days, with a vote on the House floor next week.

That was already an ambitious timeline without much wiggle room: Since McCarthy has promised members will have 72 hours to read the bill before a vote, Republicans expect they’d need to see text by Tuesday. GOP leaders have insisted they’re trying to avoid forcing votes into the Memorial Day recess, with many lawmakers planning to go abroad on planned delegation trips.

Even so, both parties have acknowledged the difficulty of the negotiations — with a Democratic Party mostly resistant to the GOP’s demand for steep spending cuts and work requirements for social programs. Then there’s the Republican push for energy permitting reform: a tricky policy issue that’s difficult to resolve in just a handful of days, even with Democratic appetite for an agreement there.

Adam Cancryn contributed to this report.