So far, it looks like no deal.
With the unofficial start to summer upon us, millions of Americans are heading out of town for the holiday weekend for a little relaxation, and lawmakers are no exception — even those in the middle of a high-stakes battle over the debt ceiling.
Without an agreement to vote on, the House is set to break for a week-long holiday recess as the U.S. slides toward the nation’s first-ever default. There’s one condition, though: They’ll need to be prepared to return to the nation’s capital if a deal is reached while they’re gone. (In case you were wondering, the Senate is currently out and has similar orders).
But not everyone’s happy about the move, including House Democratic leader Hakeem Jeffries. “It’s my understanding that the designees of both President Biden as well as Speaker McCarthy will continue to talk, but, unfortunately, House Republicans have chosen to get out of town before sundown,” Jeffries said in a statement.
Still, negotiators for both the White House and House leader Kevin McCarthy have been meeting daily to hammer out an agreement. As we await a compromise, here’s what we know about where leaders currently stand and whether there really is a deadline to avoid what could lead to a global financial catastrophe.
Where do debt ceiling talks stand now?
Biden and McCarthy look like they’re getting close to an agreement to slash spending and raise the government’s debt ceiling, which now tops $31.4 trillion. The arrangement would specify how much the government can spend on discretionary programs, such as housing and education. But it only sets broad spending outlines, which leaves some key details unknown, such as how much goes toward the military.
There’s also some major disagreement on where certain government cuts should fall. For instance, Biden has rejected some GOP proposals to tighten work requirements for anti-poverty programs and loosen oil and gas drilling rules. “I don’t believe the whole burden should fall back to middle-class and working-class Americans,” he told reporters.
As of early May 26, negotiations appear to be gaining momentum, but some fundamental disagreements remain. Per the New York Times, the compromise taking shape would allow Republicans to say federal spending is being reduced (though spending on military and veterans’ programs would continue to increase), and Democrats to say that they’d protected most domestic spending. However per CNN, Democratic Rep. Susan Wild has warned that the White House has taken House Democrats’ votes for granted.
Once a deal is in place how long would it take to pass a bill?
According to CNN, Rep. Patrick McHenry, a lead GOP negotiator on debt limit talks, said that once a deal is struck, the House will need at least 24 to 48 hours to write the legislative text, and then House members will have just three days to read it.
The next big hurdle will be getting the bill passed in both the House and the Senate. But that will be no easy task, as some Republicans and many Democrats have prickled at the prospect of compromise. While GOP Rep. Chip Roy has insisted that any deal must include previously approved sharp spending cuts, Democratic Rep. Steven Horsford has urged Biden to “use the power of the bully pulpit of the presidency.”
“I don’t think everybody’s going to be happy at the end of the day. That’s now how the system works,” McCarthy told reporters.
When is the debt ceiling deadline?
Even though Treasury Secretary Janet Yellen has repeatedly warned that the U.S. will run out of cash by June 1, this so-called X-date is nearly impossible to pin down. And this uncertainty has caused some skepticism among Republicans about whether the deadline is real. Members of the conservative House Freedom Cause have called on Yellen to “prove” her estimated default date.
In response, Yellen has said there was some inherent variability when it comes to tracking government payments and receipts. “These estimates are based on currently available data, and federal receipts, outlays and debt could vary from these estimates,” Yellen explained to lawmakers. “The actual date the Treasury exhausts extraordinary measures could be a number of days or weeks later than these estimates.”
What we do know for now is that the government is essentially living paycheck to paycheck, and if Congress doesn’t act, Yellen warns that the Biden administration will have to make some “very tough choices.” Despite her concerns, she remains optimistic that the brinkmanship will end.
“I think a deal is possible,” Yellen said. “They’re working toward an agreement that could command bipartisan support.
