Debt ceiling deadline questioned as negotiators zero in on key issues

Debt ceiling deadline questioned as negotiators zero in on key issues

US House of Representatives Speaker Kevin McCarthy (R-CA) addresses the media as he exits a debt ceiling meeting with US President Joe Biden at the White House May 22, 2023 in Washington, DC.

Andrew Caballero-Reynolds | AFP | Getty Images

WASHINGTON — A significant group of Republicans in the House of Representatives on Tuesday questioned whether the Treasury Department’s June 1 deadline to avoid a potential US debt default was correct.

“We’d like to see more transparency as to how they get to that date,” House Majority Leader Steve Scalise said at a news conference on Tuesday.

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Scalise also said he believes Treasury Secretary Janet Yellen’s recent comments, released Monday, “implied that it’s June 1st or later, which gives some openness to the idea that June 1st might be.” is not the so-called X date.”

Yellen released a new letter to congressmen on Monday that appeared to express the opposite of Scalise’s claims, notably omitting a line from an earlier letter about how extraordinary measures could buy the United States more time to implement a avoid defaulting on their debts.

“We haven’t really seen a lot of transparency, but it looks like they’re now hedging and opening the door to pushing that date back,” Scalise said.

A Treasury Department spokeswoman did not immediately respond to CNBC’s request for comment.

On Capitol Hill, debt ceiling negotiators prepared to narrow their focus to a smaller set of key issues ripe for compromise – an encouraging development given that there were just nine days before the US faced the serious threat of a possible debt catastrophic sovereign debt default.

“We’re getting closer,” House Speaker Kevin McCarthy told reporters late Monday, adding that the “circle” of problems is “just getting smaller, smaller, smaller.”

Topics still on Tuesday’s agenda included energy permit reforms, new labor requirements for some forms of federal aid and the redistribution of unused Covid-19 emergency funds.

Also on the table are “health savings,” CNBC reported Monday. This could include reforms to government payments to healthcare companies under several major federal health plans.

US House Speaker Kevin McCarthy, a Republican from California, center, speaks with members of the media upon his arrival at the US Capitol in Washington, DC, on Tuesday, May 23, 2023.

Nathan Howard | Bloomberg | Getty Images

McCarthy met with President Joe Biden Monday afternoon, a face-to-face meeting both sides described as “productive” but which failed to secure the deal to raise the debt ceiling that financial markets and global investors are hoping for.

House Republicans held their weekly conference session Tuesday morning, at which McCarthy reportedly said they were “nowhere near an agreement” and urged the faction to stick together and support the agreement he eventually reaches.

“Less than 10 days after a default, Joe Biden has yet to offer or accept our reasonable solution that raises the debt ceiling and addresses our debt crisis,” House Republican Conference Chair Rep. Elise Stefanik, NY, said Tuesday.

A Republican negotiator, Rep. Patrick McHenry, North Carolina, told reporters that spending was still the biggest hurdle to an agreement.

“The fundamental issue here is spending. This isn’t about gameplay,” McHenry told the Republican National Committee on Tuesday. “The point here is that we strike a deal before the deadline that is in line with the speaker’s message that next year we will spend less money than we do now.”

Biden hopes to reach an agreement on the debt ceiling that would push the next deadline past the 2024 presidential election. But Republicans in the House, who have only endorsed a year-long hike so far, say if Biden wants more time, he must agree to more cuts.

This is an evolving story. Please check again for updates.