House Speaker Kevin McCarthy said ongoing talks to avert a historic US default were yielding little progress, even as President Joe Biden announced plans to meet with congressional leaders on Tuesday.
(Bloomberg) — House Speaker Kevin McCarthy said ongoing talks to avert a historic US default were yielding little progress, even as President Joe Biden announced plans to meet with congressional leaders on Tuesday.
“We are nowhere near reaching a conclusion,” McCarthy said Monday on Capitol Hill, adding he felt that ongoing staff-level meetings are “not productive at all.”
The talks so far have not produced “agreement on anything,” he added.
His remarks came shortly after Biden told reporters in Philadelphia on Monday that the meeting was set, a day after confirming it was in the works. Neither McCarthy nor the White House was able to provide a time for the sit-down, which will be the second session for Biden and congressional leaders this month and comes after aides met last week and through the weekend.
The standoff has been roiling markets as investors bet whether a deal can be reached. Treasury Secretary Janet Yellen has warned that a default could come as soon as June 1. A default would sink markets, leave potentially millions out of work and hike borrowing costs for families and the US government alike.
The sides have sent mixed signals. Biden said Sunday that he was optimistic a deal could be reached, while McCarthy spent Monday downplaying the odds of success. People familiar with the meetings have said that the White House has pushed to exclude elements of the bill passed by House Republicans last month – including eliminating the president’s program to forgive some student loans, as well as signature legislative accomplishments – from discussions.
Republicans, meanwhile, rejected a Democratic proposal that would seek to raise revenue – and decrease future deficits – by altering a dozen provisions of the tax code, including a loophole that allows investors in cryptocurrency to claim losses on assets that they then purchase. Democrats also proposed eliminating a loophole that allows large real estate investors to effectively receive interest-free financing from the government.
Those tax offerings, which were part of Biden’s budget proposal earlier this year, were first reported by the Washington Post. The White House offered to bring Republicans additional proposals but were told that the GOP would not consider any effort to raise taxes, according to the people familiar.
Last week, Representative Dusty Johnson, one of the authors of the House bill, said the GOP has three red lines: no clean debt increase, no tax increase, and the bill must reduce the deficit.
But the two sides are negotiating around possible spending caps in future years, changes to energy permits and a GOP-led bid to claw back $65 billion in unspent pandemic funds.
A key topic of dispute in the negotiations is expanding work requirements for anti-poverty government benefits, both McCarthy and Biden have said.
“I just don’t see the movement,” McCarthy said. “It seems as though they wanted to have meetings to say they had meetings. Not to really find a solution.”
Biden is scheduled to depart Wednesday for a trip to Japan, Papua New Guinea, and Australia. White House officials said Monday that those plans have not changed despite the ongoing debt talks.
–With assistance from Josh Wingrove.
(Updates with tax proposals.)
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