Tuesday, July 23, 2024

Debt ceiling talks have failed, with negotiators pressing for a pause for now

(CNN) Debt ceiling talks between the White House and House Speaker Kevin McCarthy’s office have reached an impasse, and negotiators have suspended talks, multiple sources told CNN.

Negotiators met briefly at the Capitol on Friday before parting ways, and as of now, no meetings are scheduled for that day.

The backlash is hoping there will be an agreement in principle by the end of this week.

GOP Rep. Dusty Johnson, a McCarthy ally and chairman of the centrist Main Street Caucus, told CNN that spending cuts are the biggest sticking point in stalled debt ceiling negotiations.

“We’re pretty far off the topline number,” Johnson said, referring to the amount of discretionary spending for fiscal year 2024. “McCarthy holds the line. He knows where the Republican convention is. The White House doesn’t understand that. Washington has a spending problem.”

“The gap in topline numbers is not the only problem, but it is the biggest problem,” he added.

Johnson said he thinks a deal is still possible by the early June deadline, but said “we’re in a bad position.”

“Biden has to decide if he wants a deal or not,” Johnson said.

Sources familiar with White House thinking attributed the temporary breakdown in talks to what White House negotiators consider a level of spending cuts that Republicans find unacceptable, although the White House has expressed a willingness to cut some spending. .

McCarthy confirmed the talks had stalled, saying there wasn’t enough “mobility” from the White House and that spending cuts were bringing up the issue.

“We have to get motion by the White House. We don’t have any motion yet,” McCarthy told reporters on his way to the Capitol.

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Asked why he had such an optimistic tone a day earlier, McCarthy said, “I felt we were in a place where I could see the path. The White House is — we can’t spend more money next year. We have to spend less than the year before. It’s that simple.”

A pause does not mean that the talks fall apart. High-stakes talks on Capitol Hill over the years have derailed or collapsed before negotiators got things back on track. But it underscores the challenges ahead of reaching a deal.

Time is of the essence and pressure is building to raise the borrowing limit ahead of June 1, which the Treasury Department says will keep the government from paying its bills. If America fails, it will trigger a global economic catastrophe.

McCarthy said he had not spoken to the president and did not respond to questions about next steps.

GOP representative leading negotiations for House Republicans Garrett Graves, leaving a brief meeting with negotiators in the morning, said the situation was “not productive.” He said he wasn’t sure they would meet again this weekend.

“Until people are willing to have reasonable conversations about how you can actually move forward and do the right thing, we’re not going to sit here and talk to ourselves. That’s what’s happening,” Graves said.

As talks stalled, a White House official acknowledged “real differences” and “talks will be difficult” but said the president’s negotiating team was trying to reach a “reasonable bipartisan settlement.”

This story has been updated with additional information.

CNN’s Lauren Fox, Phil Mattingly, Jeremy Diamond and Arlette Saenz contributed.

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