US House Speaker Kevin McCarthy said Wednesday he would send Republican negotiators to the White House to finish talks on the debt limit.
But McCarthy, a California Republican, said the two sides “are still very far apart.”
The debt ceiling negotiations focus on a classic issue that has vexed, divided and unsettled Washington before: Republicans led by House Speaker Kevin McCarthy want to cut federal government spending, while President Joe Biden and other Democrats don’t.
Time is short to reach an agreement. Treasury Secretary Janet Yellen said Wednesday that it “seems almost certain” the United States would not make it through early June without defaulting. That would be catastrophic, as the government risks running out of cash to pay its bills as soon as June 1.
“We are already seeing some stress in the Treasury markets,” Yellen said at a Wall Street Journal event.
“Even in the run-up to a deal, when one happens, there can be substantial financial market distress, we are only seeing the beginning,” Yellen said.
The political standoff is bringing the country closer to a crisis, roiling financial markets and threatening the world economy. Anxious retirees and social service groups are among those who make predetermined contingency plans. Negotiators head to the White House to resume talks at noon.
Buoyed by a conservative House majority that brought him to power, McCarthy, a California Republican, was unswayed by a White House counteroffer to freeze spending. “A freeze is not going to work,” McCarthy said.
“I don’t get where the Democrats think they can’t find $1 to cut,” McCarthy said Wednesday morning.
“We have to spend less than we spent last year. That’s the starting point.”
The longstanding debate in Washington over the size and scope of the federal government now has just days to resolve. Failure to raise the nation’s debt ceiling, now at $31 trillion, would risk a potentially chaotic federal default, almost certainly inflicting economic turmoil at home and abroad.
Dragging into a third week, negotiations on raising the nation’s debt limit were never supposed to reach this point.
The White House insisted from the start that it was unwilling to compromise on the need to pay the nation’s bills, demanding that Congress simply raise the ceiling as it has done many times before with no strings attached.
[Con información de The Associated Press]
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