A second meeting Friday between the White House and Republican congressional negotiators on raising the federal government’s $31.4 trillion debt ceiling broke up with no progress cited by either side and no further meeting scheduled.
It came at the end of a day of difficult talks that were interrupted for several hours, with less than two weeks to go until June 1, when the Treasury Department warned that the federal government could be unable to pay all its debts. That would trigger a catastrophic default.
The White House acknowledged that “serious differences” remained with Republicans who control the House of Representatives, who have said they will not approve an increase in the federal government’s borrowing limit without agreement on deep spending cuts.
“There continue to be real … differences between the parties on these issues,” White House spokeswoman Karine Jean-Pierre told reporters in Hiroshima, Japan, where President Joe Biden is attending a meeting of leaders of the Group of Seven wealthy nations.
The leading Republican in the talks said no progress had been made Friday.
“We had a very, very frank discussion where we talked about where we are, talked about where things need to be,” Republican Rep. Garret Graves told reporters after a second brief meeting in the Capitol with White House officials.
“This was not a hearing tonight,” Graves said, adding that the time for the next meeting had not been determined.
He echoed statements by House Speaker Kevin McCarthy that progress needed to be made to change the “trajectory” of America’s government deficit spending and rapidly rising debt.
“We have to spend less than the year before,” McCarthy said.
The talks have hung over Biden’s meeting with world powers in Japan. A second Republican negotiator, Representative Patrick McHenry, said he was not sure the two sides could meet McCarthy’s goal of reaching an agreement this weekend, which could then be presented to Congress for approval in the coming days.
Senior White House adviser Steve Ricchetti left the briefing room, telling reporters he was “not evaluating” the talks.
A meeting earlier Friday ended abruptly with McCarthy telling reporters there had been “no movement” from the White House toward Republican demands.
US stock markets closed the week on a weak note following news of the aborted negotiations. Republicans are pushing for steep spending cuts in exchange for raising the government’s self-imposed borrowing limit, a step regularly needed to cover costs of spending and tax cuts previously approved by lawmakers.
Republicans control the House of Representatives by a 222-213 margin, while Biden’s Democrats hold a 51-49 majority in the Senate, making it difficult to thread the needle on a deal that will find enough votes to pass both chambers.
Democrats have pushed to hold spending steady at this year’s levels, while Republicans want to return to 2022 levels. A plan passed by parliament last month would cut a large chunk of public spending by 8% next year.
That plan does not specify what spending would be cut, but some Republicans have said it would protect military and veterans programs. Democrats say that would force average cuts of at least 22% to domestic programs such as education and law enforcement, a figure that top Republicans have not disputed.
Some Republicans have criticized Biden for taking the trip to Japan at a key point in the talks.
Biden and McCarthy spent most of the year at an impasse with the White House, insisting on a “clean” increase in the debt ceiling without conditions. Republicans said they would only vote for a deal that reduced spending.
They agreed to two-way talks, with the White House represented by Shalanda Young, director of the Office of Management and Budget, and Ricchetti. McCarthy was represented by Graves and McHenry.
The Republicans have taken a hard line. On Thursday, the House Freedom Caucus urged the Senate to vote on a previously passed House bill that would raise the cap through March in exchange for 10 years of deep spending cuts.
House and Senate Democrats have expressed concern about the inclusion in discussions of new work requirements for some federal benefit programs for low-income Americans.
The last time the nation came this close to the standard was 2011, also with a Democratic president and Senate along with a Republican-led House.
Congress eventually averted default, but the economy endured severe shocks, including the first-ever downgrade of America’s top credit rating and a major stock selloff.