White House, GOP pause debt-ceiling negotiations

Debt ceiling negotiations between the White House and House Republicans have been put on pause, according to two people familiar with the conversations.

“A path to a reasonable bipartisan budget agreement is still possible as long as both sides recognize that they won’t get everything they want and compromise is necessary,” a Biden administration official, speaking on the condition of anonymity to discuss private conversations, told The Washington Post.

The pause in talks is widely seen on Capitol Hill as a potential negotiating ploy from leaders aimed at assuring their bases that they are fighting aggressively for their sides’ priorities.

The two groups earlier Friday had not agreed on when to meet again, according to a person familiar with the conversations.

The snag comes amid a months-long standoff between Democrats and Republicans, and once again ratchets up concerns that the United States could default on its debts if an agreement is not reached by early June. Treasury Secretary Janet L. Yellen projected that the United States could default on its debts “as early as June 1” without congressional approval to raise the nation’s debt limit.

Earlier this week, Biden met with congressional leaders—including McCarthy and Senate Minority Leader Mitch McConnell (R-Ky.)—at the White House to try to break the impasse. They emerged from the meeting sounding optimistic that they would reach an agreement before the June 1 deadline.

At the time, Biden described the meeting as “good, productive,” and McCarthy had said it would be possible to reach a deal by the end of this week.

“It’s not that difficult to get to an agreement,” McCarthy said then.

Democrats and Republicans have agreed that the United States defaulting on its debts for the first time in history would be catastrophic. White House economists said in an analysis earlier this month that an extended breach of the nation’s borrowing limit could wipe out more than 8 million jobs and cause “severe” economic damage.

Biden has insisted that Congress vote to increase the debt ceiling with no conditions attached – as Republicans and Democrats did three times during the administration of his predecessor, President Donald Trump. But Republicans in control of the House with a Democratic president have demanded deep spending cuts in exchange for raising the debt limit.

The limit is a cap on the total amount of money that the United States is authorized to borrow to fund the government and fulfill its financial obligations. It is not new spending but rather allows the country to spend money on programs that Congress has authorized.