Debt limit talks stalled as McCarthy says WH has ‘moved backwards’

House Speaker Kevin McCarthy accused the White House of backtracking on talks to raise the US debt limit and said he did not expect any progress until President Joe Biden returned to Washington from the Group of Seven summit in Japan .

“I don’t think we’ll be able to move forward until the president is back in the country,” McCarthy told reporters at the Capitol on Saturday. “Just from the last day until today, they went back. They actually want to spend more money than we’re spending this year.

McCarthy’s comments confirmed a new shift in tone toward mutual recriminations after the White House suggested earlier Saturday that Republicans were negotiating in bad faith. The clock is ticking with Treasury Secretary Janet Yellen saying the US could lose its ability to pay all its bills by June 1.

Biden signaled earlier on Saturday that he remains confident the US government can avoid catastrophic bankruptcy.

Cost cuts

Republicans and the White House are fighting over spending cuts that GOP lawmakers are demanding as the price of raising the federal borrowing limit.

“We have to spend less than we’re spending this year,” McCarthy said, repeating his ultimate demand.

Lawmakers are stepping up their attacks on each other as talks stall — despite showing signs of progress earlier in the week.

“I think Bernie Sanders and the socialist wing of their party had a real effect on the president, especially since he was out of the country,” McCarthy said.

White House press secretary Karine Jean-Pierre told a news briefing from Hiroshima, Japan, on Saturday that there were “real differences between the two countries.” And Deputy Press Secretary Andrew Bates said House Republicans were “taking the American economy hostage” and cast the GOP caucus as beholden to right-wing members.

For the deal to succeed, the cuts must be significant enough to appease conservative Republicans, who backed a McCarthy presidency on the condition that he achieve major spending reforms without raising taxes or cutting military spending and veterans benefits.

But the plan also needs to be acceptable to Democrats, who hold a majority in the Senate and would likely need to secure between 50 and 100 votes in the House. Few in the president’s party want cuts to domestic programs, especially without corresponding cuts in the Pentagon budget or closing tax loopholes used by the wealthy and large corporations.

The desire to wait for Biden may be informed by the Republican belief that the president will eventually decide to sacrifice progressive priorities to defuse the biggest threat to the economy ahead of his re-election campaign. The president has already de facto backed away from his promise not to negotiate on raising the debt ceiling.

The debt ceiling fight, which could trigger the first ever US default, threatens to inflict pain on the global economy. It overshadowed Biden’s overseas trip, and the president had previously decided to cut short his travels to return to Washington for the final stages of the talks.

Republicans’ walkout from talks in Washington on Friday dashed hopes that negotiators were close to a deal to raise the borrowing limit, sending stocks tumbling.

McCarthy had hoped to at least reach an agreement on a deal plan this weekend to facilitate a House vote on the legislation next week.

The Senate left Washington for its Memorial Day recess, but senators were told to be ready to return on 24 hours’ notice if needed.

Biden will meet with Ukrainian President Volodymyr Zelensky during the G7 on Sunday, according to a White House statement. He is due back in Washington late Sunday.

– With assistance from Justin Sink and Kaylee Leinz.

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