With debt default as soon as a week away, U.S. House jets off for holiday break
U.S. House Speaker Kevin McCarthy, a California Republican, speaks with reporters about the debt limit and government funding negotiations outside the Capitol building on May 25, 2023. (Photo by Jennifer Shutt/States Newsroom)
WASHINGTON — U.S. House members walked down the steps of the Capitol building Thursday to head back to their districts for a Memorial Day recess that began exactly one week before the country could default on the debt.
House Democrats took to the floor after the final vote of the week to give a series of one-minute speeches decrying Republicans for not moving a bill to raise the debt limit without attaching GOP priorities that otherwise couldn’t move through the Democratically controlled Senate. Meanwhile, Fitch Ratings raised concerns about the debt limit brinkmanship on Wednesday evening, placing the United States’ AAA-bond rating on a negative watch.
Top House Republicans negotiating with the White House, who have been unable to clinch a bipartisan agreement that can pass the divided Congress, did not immediately leave to fly home or head abroad on official trips ahead of the week-long break.
They’ll instead stick around in search of an agreement on the debt limit and government spending that may also include energy permitting projects and tightened work requirements for some safety net programs.
Speaker Kevin McCarthy, a California Republican, said Thursday the negotiators want to make sure they get to an agreement “that’s correct.”
“These are very simple things that we can actually get a solution on,” McCarthy said. “The White House knows where we are. We’ve never changed our position the whole time. We’ve passed a bill that says a lot of this. They know where to work from. I think we can get this done.”
McCarthy has repeatedly said he won’t agree to pass a stand-alone debt limit bill, pressing Democrats to negotiate on other GOP priorities. He has said the federal government must spend less during the upcoming fiscal year than it did during this year. And he’s said Republicans won’t agree to increase taxes.
Democrats have repeatedly criticized the Republican stance and the two sides appear to have made little progress in negotiation.
“The interesting thing is many of these folks, my colleagues on the other side of the aisle, are the same people that clowned me on Twitter for not having the best credit after my campaign and being denied an apartment here in D.C.” Florida Democratic Rep. Maxwell Frost said during the one-minute remarks on the floor.
“Imagine the hypocrisy of poor-shaming working people for trying to pay off their debts and then turning around and refusing to pay the country’s debts to pay for the tax cuts for billionaires,” he added. “It’s distasteful, it’s disgraceful and we have to do better.”
Michigan Democratic Rep. Rashida Tlaib said “the mind-boggling part” is that Republicans voted to suspend the debt limit three times during the Trump administration.
“Republicans love to talk about fiscal this, spending that, but not when it comes to tax cuts to mega-billionaires or when it comes to funding bombs and wars that our country and our world doesn’t need,” she said. “They are so completely disconnected with the American people.”
Ratings agency raises worries
If the talks don’t yield a bipartisan agreement that clears the U.S. House and U.S. Senate before June 1, Treasury Secretary Janet Yellen has said the country could default on its debts for the first time, leading to significant consequences for government programs and the global economy.
Under a default, the Treasury Department would no longer be allowed to borrow money to pay all of the government’s bills in full and on time. That would likely mean delayed payments on hundreds of federal programs, including military paychecks, veterans benefits, Social Security checks and payments for Medicare and Medicaid services.
Fitch Ratings in its assessment said it still expects an agreement but “risks have risen” as the talks drag on.
“The Rating Watch Negative reflects increased political partisanship that is hindering reaching a resolution to raise or suspend the debt limit despite the fast-approaching x date,” the ratings agency wrote, referring to the default date.
“Fitch still expects a resolution to the debt limit before the x-date. However, we believe risks have risen that the debt limit will not be raised or suspended before the x-date and consequently that the government could begin to miss payments on some of its obligations.”
The United States holds the best bond rating, the AAA, from Fitch and Moody’s. However, S&P downgraded the country to AA amid the 2011 debt limit stalemate.
North Carolina Republican Rep. Patrick McHenry, one of the negotiators, said Thursday he’s “worried about the consequences of us not coming to terms and raising the debt ceiling.”
“I’m still trying to work for the deal. And it looks very difficult because it’s very difficult subjects we are dealing with,” McHenry said. “I’ve made no secret about this, it’s not a position I wanted us to be in.”
McHenry said Republicans’ goal with these negotiations is to do things differently, instead of kicking the can down the road.
Louisiana Rep. Garret Graves, the other negotiator, said there weren’t yet plans for the negotiators to sit down again with the White House team. But he added they “began seeing a little bit of movement” on Wednesday.
“This is a top priority for us,” Graves said. “The speaker indicated we can eat and sleep on weekends and that we’re supposed to be working right now.”
Arkansas Republican Rep. Steve Womack, chair of the Financial Services and General Government spending panel, said he expected negotiators to continue down to the wire.
“The way Congress operates, you can expect it to be done kind of at the last minute,” Womack said. “And we’re running through those sands in the hourglass right now.”
“As the hourglass continues to empty, I think, the sides will get a little closer. But that’s all I can tell you about,” Womack added.
‘Staggering’ cuts predicted by DeLauro
House Appropriations Committee ranking member Rosa DeLauro, a Connecticut Democrat, said her party must not move toward the Republican position on spending.
“The scale of the cuts is staggering, which really the public knows very little about,” DeLauro said. “You can ask the public to cut spending, and they will say ‘Amen.’ On the other hand, when you put up there, what those cuts are, then people take notice.”
If Republicans do secure an agreement to cut funding on discretionary programs, DeLauro said, the Appropriations committees would have to determine which federal programs lose funding.
Cuts could impact an array of programs that matter to Americans’ quality of life, such as veterans’ health care, Head Start, federal grants to law enforcement agencies and more, she said.
“That part of the story hasn’t been really told,” DeLauro said.
Texas Rep. Chip Roy, one of the more conservative Republicans in the House, expressed his concerns with the direction negotiators are moving.
“I applaud the speaker and Garret and Patrick and everybody for moving us all and negotiating on our behalf. But again, don’t take an exit ramp five exits too early,” Roy said. “Let’s hold the line and do what we said we were going to do for the American people.”
Roy said he planned to stick around Washington, D.C., for another day before heading back to Texas for the weeklong break, though he said he planned to have conversations on the debt limit from his home state.
Utah Republican Sen. Mike Lee threatened Thursday to hold up any bipartisan deal in the Senate if it doesn’t meet his expectations.
“I will use every procedural tool at my disposal to impede a debt-ceiling deal that doesn’t contain substantial spending and budgetary reforms,” Lee tweeted. “I fear things are moving in that direction. If they do, that proposal will not face smooth sailing in the Senate.”
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