Washington The White House made an offer to House Republicans that would cap discretionary spending at fiscal year 2023 levels for two years and cancel up to $30 billion in unspent COVID-19 relief money in exchange for an extension debt ceilingCBS News learned.
The bid is the latest sign that the two sides may be close to an agreement that would avert a government default, an unprecedented event that would have wide-ranging effects on the global economy. The latest proposal from the White House is to extend the debt ceiling by about two years, which would put the issue off the table until after the 2024 election.
House Speaker Kevin McCarthy has insisted he wants to limit spending to 2022 levels, and conservative Republicans have been, too. Click on McCarthy To “stay the line” on spending cuts. House Republicans passed a bill in April to extend the debt ceiling and spending cap at 2022 levels. The White House argues that a two-year spending cap would cut spending by more than $1 trillion, a view not shared by House Republicans.
Negotiations between the White House and McCarthy representatives continued Thursday, with some indications that a deal was imminent. McCarthy said Thursday morning that negotiators worked “well after midnight” the night before, and he said he directed his negotiating team to work “24/7” to reach an agreement.
According to a source familiar with the talks, permitting reform and work requirements are still a work in progress for negotiators. The two sides are also developing a mechanism to incentivize Congress to pass all 12 annual appropriations bills to fund the government. The source said that if an agreement cannot be reached, any ongoing short-term decision will be subject to different spending ceilings.
Treasury Secretary Janet Yellen has warned that the US could default and be unable to pay its bills as soon as early June, and it will take some time for any deal negotiated to pass both houses of Congress. Lawmakers are leaving Washington, D.C., for the Memorial Day recess, even though congressional leaders have warned them to prepare to return at short notice.
President Biden reiterated Thursday afternoon that he and McCarthy were at least on the same page about avoiding default.
“Speaker McCarthy and I have had many productive conversations, and our staff continues to meet as we speak, as a matter of fact, and they’re making progress,” the president said Thursday afternoon. “I’ve made it clear time and time again, defaulting on our national debt is not an option. The American people deserve to know that Social Security payments will be there, that Veterans Hospitals will remain open, that economic progress will be made and we’re continuing to do so.” Negligence puts all of that at risk. Congressional leaders understand that, and they’ve all agreed — there will be no default. “
Kathryn Watson and Rebecca Kaplan contributed to this report.
Weijia Jiang
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