Debt ceiling talks update between Joe Biden and Kevin McCarthy

U.S. House Speaker Kevin McCarthy (R-CA) talks to reporters at the U.S. Capitol in Washington on May 24, 2023, as he negotiates a deal to raise the U.S. debt ceiling and avoid a catastrophic default.

Jonathan Ernst | Reuters

WASHINGTON — Talks with the White House on raising the U.S. debt ceiling remained pending on Wednesday over a disagreement over baseline spending, House Speaker Kevin McCarthy said, suggesting the two sides are eight days away from the debt the government could face . Unprecedented default.

stock fell to an intraday low Investors were closely watching for any signs of progress in the talks after McCarthy’s comments.

At the Capitol, House Republicans and White House negotiators are expected to resume talks in a conference room near McCarthy’s office, where they have spent hours each day this week.

A Democratic official familiar with the situation told NBC News on Wednesday that the talks hit a “speed bump.”

But outside the ring road, increased worry The question is whether negotiators can strike a deal that cuts government spending enough to win Republican votes to pass a bill raising the debt ceiling by June 1.

Treasury Secretary Janet Yellen said on Wednesday she had seen “some stress in financial markets” amid concerns that the U.S. could slip into its first-ever debt default.

Yellen told a Wall Street Journal event that pressures related to the debt ceiling have particularly affected the Treasury market. These signs of stress “should serve as a reminder of the importance of reaching an agreement in a timely manner.”

But after a week of daily meetings chaired by a group of seasoned negotiators, people on both sides said the gap between what House Republicans want and what the White House is willing to deliver appears to be wider than ever.

For example, one of the leading Republican representatives, Rep. Patrick McHenry of North Carolina, debunked what he hadn’t hinted at until then on Tuesday night when a reporter asked him what concessions Democrats were getting in negotiations in order to win them over. Ballots in the House of Representatives.

“The debt ceiling,” he said.

“That’s what they got,” added Rep. Garrett Graves of Louisiana, another Republican negotiator.

The notion that Democrats have been forced to accede to Republican demands over the past week, with Republicans offering only a chance to avoid a catastrophic debt default, would inflame Democrats and reduce the chances of a deal. Republicans have pushed for spending cuts as part of any deal to raise the debt ceiling, which itself would not authorize new spending.

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A default would wreak havoc on the U.S. economy and force millions to lose, at least temporarily, the government benefits that many depend on.

Negotiations have reached an apparent breaking point for the second time in a week, and the chances of reaching a deal within the next 24 hours — in time for the House to turn the deal into a bill and vote it by the weekend — look very slim, McCarthy seems Willing to let House members leave Washington for Memorial Day weekend without a deal.

“I haven’t made that decision yet,” he told reporters Tuesday, but added, “I’ll let them go home and come back, depending on the circumstances.”

Republicans only seemed to strengthen their position over time, with Democrats accusing McCarthy on Wednesday of bowing to pressure from the far right of the caucus. They said he had bowed to members who listed a long list of demands but were unlikely to vote to raise the debt ceiling, whatever it contained.

One of the laundry lists was released Wednesday by Rep. Chip Roy, R-Texas, a member of the ultraconservative House Freedom Caucus.presented as memorandumthe list contains seven provisions that were included in the debt limit bill narrowly passed by House Republicans in April, although every Democrat and Four republican.

“The following reforms are part of the Limits, Savings, and Growth Act — each of which is critical, and none of which should be abandoned simply to seek a ‘deal,'” Roy’s memo read.

This pressure from party hardliners makes McCarthy’s path to passage more perilous because he needs Democratic votes.

The Democratic official told NBC News that Biden has proposed compromises that include a spending freeze, unspent COVID funding and a two-year spending cap.

But McCarthy dismissed those concessions.

“Let me be very clear, we’re not going to put anything on the floor that costs no less than what we spent this year,” he said Tuesday.

This is a developing story, please check back for updates.

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