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Where the Debt Talks Stand Six Days Before Default Deadline

Capitol Hill entered Friday with wishful thinking that there could be an elusive debt deal. Instead, it seems to be stuck in eternal Groundhog’s Day: Progress, but no agreement yet.

Republican negotiators entered Speaker Kevin McCarthy’s office on Friday with no meetings with the White House currently on the books, though they say they are in “constant” communication. And while they keep indicating the ball is moving forward, they’re not signaling that Friday will be the magic day they can clinch an agreement with the White House — with a potential default just six days away.

Asked Friday morning if he thought they could close out talks by the end of the day, Rep. Patrick McHenry (R-N.C.), one of the GOP negotiators, threw up his arms in a shrug.

“Here we are night after night after night. And the pressure is more. And the consequences are greater. We recognize that. We know this and the White House surely recognizes this,” he said.

There have been indications that House Republicans and the White House are making real progress. The two sides have all but finalized the spending portion of discussions, a source familiar with the talks told POLITICO late Thursday night.

Conservative Republicans were also passing around a list, which a Republican familiar with the matter said came from leadership, that detailed where the two sides have apparently found agreement. That includes: An agreement to lift the debt limit through 2024, a procedure in place to incentivize Congress to pass all 12 spending bills and a plan to claw back unspent Covid money.

But as the old Capitol Hill adage goes: nothing is agreed to until everything is agreed to. A second Republican familiar with the talks warned on Thursday night that negotiators have not reached a deal on top-line spending numbers or how long the debt ceiling extension would be. They cautioned that there can’t be an agreement on other details until those get fully ironed out.

But those leaks have sparked heartburn from McCarthy’s conservative flank, threatening to crack the unity House Republicans have portrayed since they passed their own debt plan. McCarthy, however, downplayed the criticism from the right, saying that they “don’t know what is in the deal.”

“I’m not concerned about anybody making any comments right now,” McCarthy said Friday.

And McHenry warned that the detail drip could impede negotiators’ ability to lock down an agreement.

“The tweets, the content, the details, and all this stuff, the leaks, don’t serve getting an agreement that changes the trajectory of the country,” he said.

But both sides do, generally, agree that they are making progress, even as the country slides closer to the June 1 deadline that Treasury Secretary Janet Yellen has warned is the earliest that the country is at risk of defaulting.

McCarthy told reporters Friday that he thought “We made progress last night. We’ve got to make more progress now.” He and Rep. Garret Graves (R-La.), the lead GOP negotiator, also had a powwow earlier Friday on a shared bike ride.

“I’m going to work as hard as we can to try to get this done, make more progress today, and finish the job,” McCarthy said.

But work requirements and permitting reform remain two major sticking points. The White House, according to a person familiar, is “continuing to push against measures that they are concerned would drive Americans into poverty or take their health care away.” But McCarthy accused Democrats of wanting to pay people who are “able bodied with no dependents” to stay home.

“At times, we have philosophical differences of opinion,” McCarthy said.

Once negotiators are able to reach an agreement, lawmakers expect it will take one or two days to turn it into legislative text. Republicans have also pledged to wait 72 hours once that is finalized before any vote — part of the deal McCarthy struck with conservatives to win the speaker’s gavel.

In that scenario, negotiators will need to clinch a deal Friday or Saturday to move a bill through the House before the earliest possible default date on Thursday.

And then there’s the Senate. No one expects the chamber to pass the bill by unanimous consent — especially after Sen. Mike Lee (R-Utah) committed to slow down the process — meaning it could take the upper chamber days to pass the legislation before it goes to President Joe Biden’s desk. If June 1 is the actual default date, which Yellen is likely to offer more guidance on next week, that could be a huge problem.

Sen. Chris Coons (D-Del.) said Thursday he hopes all Democrats can support whatever legislation emerges from the negotiations, but he wasn’t sure.

“It depends what’s in it. It’s rare that we get absolutely every vote on absolutely everything. But this should be one that you trust our president,” he said.