Biden, McCarthy getting ‘closer’ to debt ceiling deal before clock runs out

WASHINGTON − White House and Republican negotiators are getting "closer" to a deal to raise the debt ceiling before next Thursday, according to a Democratic source familiar with talks, as President Joe Biden and lawmakers prepare to leave Washington for the long Memorial Day weekend.

The two sides, working into Thursday evening, made progress on annual spending caps, one of the main sticking points in negotiations, according to the source. A potential compromise would cap annual discretionary spending for two years, less than the six years Republicans have sought, but essentially keeping spending levels flat for domestic programs.

The deal would raise the debt ceiling, which sets the limit on how much the government can borrow, through the end of 2024.

In another concession to Republicans, a deal in the works would roll back $10 billion of $80 billion in IRS funding approved in Biden's Inflation Reduction Act last year that was designed to crack down on wealthy Americans and corporations that evade taxes.

A report from Reuters said Biden and House Speaker Kevin McCarthy were $70 billion apart on discretionary spending in a "slimmed-down bill" expected to emerge that will detail top-line numbers for yearly spending. McCarthy has said he wants to spend less in the next fiscal year than last year. The White House declined to comment.

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"They're making progress," Biden said in remarks Thursday. "I've made clear time and again that defaulting on our national debt is not an option."

Biden is racing to reach a deal with House Republicans demanding budget spending cuts to get their support to raise the debt ceiling before next Thursday, which Treasury Secretary Janet Yellen has said is the earliest date for a possible default.

'Thorny' issues remain, Republicans say

The White House and House Republicans sounded more optimistic Thursday than earlier this week when McCarthy said sides were "still far apart."

White House press secretary Karine Jean-Pierre said White House negotiators have had "productive discussions" with Republicans and reiterated that the only path forward is bipartisan legislation that gets support from lawmakers in both parties.

Rep. Patrick McHenry, R-N.C., one of the top Republican negotiators told reporters Thursday, "The work that we're doing centers on a shorter and shorter array of issues."

“Closer? Yes. Is it more difficult? Yes,” McHenry said, describing "thorny" issues that remain.

In addition to spending caps, talks between the White House and House Republicans have centered on Republicans' proposals for stricter work requirements for recipients of food stamps and other welfare benefits, expedited permitting for oil and gas projects, and rescinding COVID-19 relief money.

One of the remaining holdups is finalizing an agreement on work requirements, which the White House has resisted.

With just six days before a possible default, any deal faces a complicated logistical path for passage. Legislation can take multiple days to write up. McCarthy has also told Republicans he will follow a rule giving members 72 hours to read a bill before holding a vote.

It's also unclear whether a deal will have the votes in Congress for passage even if it has the backing of Biden and McCarthy.

Some hardline conservative Republicans in the House have signaled they won't vote for a negotiated deal on the debt ceiling regardless of the details, while others are making new demands at the eleventh hour.

Meanwhile, House Democrats have raised concerns about Biden caving on spending cuts without getting adequate concessions in return.

Thirty-five Republicans members of the House Freedom Caucus sent a letter to McCarthy Thursday urging him to "fight on behalf of every policy" of the Republican-backed debt ceiling bill passed last month, which included repealing Biden's Inflation Reduction Act, a nonstarter for the White House.

The 35 Republicans also asked McCarthy to add new border security measures, an area unlikely to find White House support.

"Despite claiming he would be 'blameless,' the letter reads, "President Biden is entirely responsible for any breach in the debt ceiling, period."

Biden set to depart for Camp David and Delaware with deal in doubt

Unless a deal is reached Friday, negotiators are expected to continue to meet virtually over the Memorial Day weekend.

House Republicans began leaving for their Memorial Day weekend on Thursday with no deal in place but are on a 24-hour notice from McCarthy to reconvene at the Capitol if necessary.

Biden is scheduled to travel to the Camp David presidential retreat in Maryland on Friday and then his home in Wilmington, Delaware, on Sunday before arriving back in Washington for Memorial Day on Monday. Tuesday marks the eighth anniversary of the death of Biden's late son, Beau Biden, who died of brain cancer in 2015. In the past, Biden has honored Beau by visiting his grave in Wilmington.

"The president can deal with this issue anywhere he is," Jean-Pierre said.

House Democrats tried to seize on Republicans' absence even though Biden is also getting out of town.

With one side of the chamber empty, Democratic Leader Hakeem Jeffries called the debt ceiling crisis "manufactured, MAGA madness" during remarks from the House floor. Next to him was a sign accusing House of Republicans of "running out of town to cause an economic meltdown."

"It is repugnant, reckless and reprehensible," Jeffries said.

Reach Joey Garrison on Twitter @joeygarrison.