McCarthy sounding most optimistic he's been about a debt deal: 'I see the path'

Speaker Kevin McCarthy on Thursday sounded more optimistic than he has in months about finalizing a debt ceiling deal in time to ward off default.

Ideally, White House and congressional negotiators can finalize an agreement in the coming days, with a vote on the House floor next week, McCarthy said. But that timeline is likely still very ambitious, since both sides remain divided on a number of issues, including work requirements for federal benefits and potential spending cuts demanded by House Republicans.

“We’re not there, we haven’t agreed to anything yet,” McCarthy told reporters this morning. “I see the path that we can come to an agreement. And I think we have a structure now and everybody's working hard. And I mean we're working two or three times a day, then going back getting more numbers.”

McCarthy's not alone in projecting renewed confidence that the talks could lead to a bipartisan deal, as top White House adviser Steve Ricchetti and Office of Management and Budget Director Shalanda Young now join White House Director of Legislative Affairs Louisa Terrell in negotiating on behalf of President Joe Biden, alongside Rep. Garret Graves (R-La.) as McCarthy's deputy. Senate Majority Leader Chuck Schumer said Thursday the negotiations are "currently making process," and warned senators to be prepared to return to the Capitol within 24 hours if the House passes a debt deal.

"As Speaker McCarthy has said, he expects the House will vote next week if an agreement is reached. And the Senate would begin consideration after that," Schumer said on Thursday afternoon. "Members should remain aware and be able to return to the Senate with a 24-hour period to fulfill our responsibilities to avoid default."

Graves and McCarthy have kept the results of the negotiations close, with the speaker not yet sharing details with the rest of his leadership team or heads of his conservative and centrist blocs.

With McCarthy still promising that members will have 72 hours to read the bill before a vote, Republicans say they'd likely need to see text by Tuesday. Lawmakers could always delay their Memorial Day recess, but party leaders are trying to avoid that due to multiple planned trips abroad.

Time is running short, however. Government and independent experts have projected that the U.S. could default on its debt as early as June 1. The Senate, meanwhile, is scheduled for a break next week, with the House departing for recess the week of May 29.

McCarthy told reporters he has the “greatest respect” for Young and Ricchetti, who are both no strangers to navigating tricky bipartisan deals on Capitol Hill.

“I mean, they are exceptionally smart. They're tough,” McCarthy said. “I just believe ... where we are today is a much better place because we've got the right people in the room discussing it in a very professional manner, with all the knowledge, all the background from all the different leaders.”

The White House has maintained that it’s negotiating on budget and spending issues separately from the debt ceiling, a position that’s becoming harder and harder to maintain as talks ramp up. House Republicans' bill to lift the debt limit, passed last month, also cut $130 billion from federal spending, in addition to imposing a decade of overall funding restrictions, tougher work requirements for federal benefits and more.

The Biden administration, meanwhile, has signaled support for a shorter budget deal, possibly in the realm of two years, in addition to some flexibility on work requirements, although not for federal health programs. Both sides have expressed an interest in attaching energy permitting reforms to a broader budget deal.

“It’s too bad we had to wait this long,” said Rep. Tom Cole of Oklahoma, a senior Republican appropriator. “I really am worried about the time. I do expect that we’ll probably have to be called back during what could be recess, but that’s part of the job.”

Cole also said it seems like both sides are “starting to exchange paper,” signaling that negotiations are starting to get serious. “That’s pretty important in this too, because we haven’t been able to get the Democrats to put anything on paper.”

Members of McCarthy’s right flank continue to insist they won’t back a final compromise just because the speaker himself supports it, especially if it differs substantially from the bill nearly all House GOP lawmakers rallied to pass last month.

“The speaker, to his great credit, is an optimistic guy. And I think that's actually one of his great strengths,” said Rep. Chip Roy (R-Texas.). “But it does need to be said that what the House passed is what the House passed.”

And some Democrats are starting to bristle at negotiations, too. Progressives aren't happy that Biden is negotiating on the debt limit at all, despite his months-long refusal to consider anything but a "clean" hike to the debt limit. And they've indicated that any additional work requirements for federal benefits like SNAP, formerly known as food stamps, and health programs like Medicaid are “a non-starter.”

“Let’s have that discussion [about work requirements] during the normal legislative process, or in the context of the farm bill,” House Minority Leader Hakeem Jeffries said on Thursday. “But we’ve continued to make clear as House Democrats that so-called extreme work requirements that MAGA Republicans want to try to impose as a ransom note are a non-starter. Period. Full stop.”

Olivia Beavers, Sarah Ferris, Jennifer Scholtes and Nicholas Wu contributed to this report.