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McCarthy sends House Republicans home, with instructions to come back to DC to vote on debt deal

By Sarah May
|
May 25, 2023

With tensions continuing to rise over a potential federal debt default in early June, Republican House Speaker Kevin McCarthy (CA-20) appeared poised to send lawmakers home Thursday while negotiators continue to seek a deal with the White House, according to CNN.

Suggesting that an agreement with President Joe Biden did not look likely to occur in the next day or so, McCarthy made clear where he believes blame for the impasse lies, declaring the stalemate, “not my fault.” as the Associated Press reports.

Cautious Optimism

According to the AP, the speaker did, however, evince a sense of optimism that the parties would reach a compromise in advance of next week, when the Treasury Department says the government's ability to pay its bills could cease.

“We're not going to default,” McCarthy declared, also indicating that those involved in continued talks have “made some progress” in discussions with the White House.

“I want to work as hard as we can and not stop,” McCarthy stated.

In keeping with those sentiments, the speaker reportedly recommended that colleagues not stray too far from D.C. during the long holiday weekend but said they would receive sufficient notice to return in the event a vote on the matter needs to be held, CNN added.

Negotiations Continue

The positions taken by the two sides in the negotiations have seemingly changed little since discussions on the debt ceiling began earlier this year, with the White House insisting on a “clean” increase in the borrowing limit with no conditions attached and Republicans seeking spending cuts in exchange for action.

However, CNN notes that negotiators involved in the process are now attempting to hash out a series of discrete issues on top of the primary GOP demand that government spending levels see significant cuts.

Early Thursday, McCarthy noted that negotiations went past midnight, with some signs of progress having emerged, but he cautioned that the June 1 default date from Treasury must be taken seriously.

“I thought we made some progress,” said McCarthy, adding, “I've directed our teams to work 24/7 to try to solve this problem.”

White House, Democrats Lay Blame

Despite McCarthy's apparent optimism, the White House on Wednesday slammed the GOP – and the speaker – for seeking “extreme” cuts in spending that risk a default capable of harming “every single part of the country.”

Press secretary Karine Jean-Pierre said the situation was a “manufactured crisis” for which Republicans are responsible and that if default occurs, the ensuing devastation will strike everyone, “whether you're in a red state or a blue state.”

Progressive Democrat Rep. Pramila Jayapal (WA-07) echoed and amplified those sentiments, saying, according to the AP, “The problem is not the White House. The problem is Kevin McCarthy and the extreme Republicans.”

“They are the ones holding this economy hostage, that are putting all these cuts on the American people,” Jayapal added.

Bracing for Impact?

Adding to the sense of anxiety swirling as June 1 draws nearer is the fact that on Wednesday, ratings agency Fitch signaled a potential downgrade of the United States' AAA credit rating, as Reuters reported.

A downgrade, if it occurs, could impact the prices of Treasury debt securities and trigger a negative chain reaction across financial markets, the outlet noted.

Even so, Fitch said that it “still expects a resolution to the debt limit before the X-date,” a perception McCarthy – at least outwardly – seems to share.

As negotiations head toward a critical juncture, new Fox News polling reveals that 57% of registered voters believe that a debt limit increase should only occur if accompanied by spending cuts, with only 27% supporting the “clean” increase Biden has demanded all along. Whether the White House will take those results into consideration as negotiations with Republicans go down to the wire, only time will tell.