Negotiators aim for weekend deal to avert debt default

White House and GOP negotiators are closing in on an agreement to lift the nation’s debt limit, with both sides predicting a deal could come together as soon as this weekend.

The two sides were sending drafts of legislative text back and forth late into the evening on Friday, according to multiple people familiar with the discussions — a sign that a bipartisan agreement could soon be within reach.

Yet while President Joe Biden publicly predicted that proof of such a deal could emerge before midnight, one GOP negotiator was slightly more cautious in the timeline, though he also sounded upbeat about an agreement.

“I’m hopeful,” said House Financial Services Chair Patrick McHenry (R-N.C.), as he entered the speaker’s suite around dinnertime Friday. “But we have to make sure we’re aligned on text, aligned on agreements. There’s significant challenges ahead, and I don’t know whether that’s hours or days”

Both parties were intent on reaching a deal as quickly as possible this weekend, even as negotiators were handed a critical extension on the pressing debt limit deadline that once loomed as soon as June 1. Now, Treasury Secretary Janet Yellen has informed Speaker Kevin McCarthy that the borrowing limit will run out on June 5.

Yet even with those extra days, McHenry insisted negotiators were pressing ahead with just as much urgency as they seek a final agreement with the White House amid intense pressure across Washington and Wall Street. 

“It maintains and ensures the urgency,” McHenry told reporters earlier Friday evening, noting some “skepticism” of the earlier date within his party.

The new, slightly delayed deadline of June 5 comes as negotiators have struggled to land an agreement on key issues, such as the GOP’s demands for new work requirements on social programs, after days of frenzied talks. Behind the scenes, plenty of progress has been made.

The two sides have all but finalized the spending portion of discussions, according to two people familiar with the talks. Also on the table is a new procedure in place to incentivize Congress to pass all 12 spending bills and a plan to claw back unspent Covid money.

It was perhaps that progress that led Biden to express hope about the direction of the talks as he spoke to reporters just before he left the White House on Friday night for Camp David.

“Things are looking good. I’m very optimistic. I hope we will have some clear evidence tonight — before the clock strikes 12 — that we have a deal,” he told reporters as he headed to Marine One. “Hopefully we will know by tonight whether we are going to be able to have a deal.”

Entering the weekend, Republican negotiators said they had not yet scheduled any in-person meetings with their White House counterparts, though they added they are in “constant” communication via calls and other electronic communications.

Once a deal is reached, lawmakers expect it will take one or two days to turn it into full legislative text. Republicans have also pledged to wait 72 hours once that is finalized before any vote — part of the deal McCarthy struck with conservatives to win the speaker’s gavel.

And both parties will need to begin an intense whipping operation to land the votes, especially in the House, where some early details of the deal have sparked heartburn from McCarthy’s conservative flank, threatening to crack the unity House Republicans have portrayed since they passed their own debt plan. McCarthy, however, downplayed the criticism from the right, saying that they “don’t know what is in the deal.”

And then there’s the Senate. No one expects the chamber to pass the bill by unanimous consent — especially after Sen. Mike Lee (R-Utah) committed to slow down the process — meaning it could take the upper chamber days to pass the legislation before it goes to Biden’s desk.

McCarthy, meanwhile, vowed that talks would continue at an urgent pace.

“I’m going to work as hard as we can to try to get this done, make more progress today, and finish the job,” McCarthy said.

But work requirements and permitting reform remain two major sticking points. The White House, according to a person familiar, is “continuing to push against measures that they are concerned would drive Americans into poverty or take their health care away.” But Republicans are accusing the White House of digging in and wanting to pay people who are “able bodied with no dependents” to stay home.

“Democrats right now are willing to default on the debt so they can continue making welfare payments for people that are refusing to work. And I’m talking about people that are without dependents, people that are able-bodied between 18 and 55,” Rep. Garret Graves (R-La.) told reporters on Friday afternoon.

Privately, Republicans acknowledge they are unlikely to force new work requirements for Medicaid, but they are continuing to push for the measure in order to keep up the pressure on the White House for their other big priorities: expanded work requirements for the emergency cash aid program known as Temporary Assistance for Needy Families and the country’s leading anti-hunger program, the Supplemental Nutrition Assistance Program.

Asked if Republicans were willing to drop work requirements, Graves added: “Hell no.” It remained an issue as of late Friday evening.

The White House, for its part, pushed back strongly on the GOP’s continued effort to add new work requirements to social safety net programs as part of the deal.

“House Republicans are threatening to trigger an unprecedented recession and cost the American people over 8 million jobs unless they can take food out of the mouths of hungry Americans,” White House spokesperson Andrew Bates said, citing GOP demands for “new, additional work requirements designed to tie the most vulnerable up in bureaucratic paperwork, which have shown no benefit for bringing more people into the workforce.”

Meredith Lee Hill, Olivia Beavers, Daniella Diaz, Rachael Bade, Jennifer Haberkorn and Katherine Tully-McManus contributed to this report.