House Speaker Kevin McCarthy said on Wednesday the White House continues to be an “obstacle” but there is still a chance for a debt-limit deal to avoid a default crisis as soon as June 1.
Mr. McCarthy said he was confident President Biden would make concessions because of that GOP unity in the House and Senate on cutting spending in exchange for raising the $31.4 trillion debt limit.
“I’m optimistic about our ability to work together. Do we have obstacles? Yes. We have a big obstacle in the White House,” he said. “But we’re going to change the course of history because we’re going to stand for the American public.”
The comments came after Mr. Biden agreed during a White House meeting Tuesday to narrow the negotiations to only administration officials and Mr. McCarthy’s staff.
“I’m confident that we’ll get an agreement on the budget and America will not default,” Mr. Biden said from the White House before he left to attend a summit in Japan of the Group of Seven industrialized nations.
In another show that the talks were getting serious, Mr. Biden opted to cut his trip short. Originally, the president was set to travel to Australia and Papa New Guinea after the G7, but will now return to Washington early.
House Republicans said any deal to hike the debt ceiling should include at least $130 billion in immediate spending cuts. Mr. McCarthy has said half of that money can be made up by rescinding more than $60 billion in unspent pandemic relief.
Democrats are open to the clawback, provided it doesn’t impact money already promised to state and local governments.
Republicans also want to expand work requirements for welfare recipients, cap future federal spending and streamline the federal permitting process for energy projects. They also want to cancel more than $200 billion in green energy tax credits that Democrats passed last year as part of Mr. Biden’s signature climate law.
Mr. Biden has signaled that the demand to nix his green energy credits is a non-starter. Still, the White House appears open to some of the Republicans’ other demands.
Negotiators are working to see whether they can combine parts of an energy proposal passed by House Republicans this year with a permitting overhaul authored by Sen. Joe Manchin III, West Virginia Democrat, that Mr. Biden endorsed.
Democrats and Republicans are split over how long to impose spending caps.
Republicans want to cap spending growth at 1% for the next decade, and Democrats are pushing for only a two-year agreement. By far, the biggest sticking point is expanding work requirements for welfare.
Mr. Biden opened the door over the weekend to accept expanded work requirements, provided they do not impact Medicaid, the federal health program for the poor. After backlash from Democrats, the president reversed course by saying he opposed increasing work requirements on food stamps for elderly recipients.
“Rather than push Americans into poverty, we should reduce the deficit by making sure the wealthy and large corporations pay their fair share in taxes,” Mr. Biden said.
For a debt limit deal to succeed, Mr. McCarthy said, all work requirements for all programs have to be on the table.
House Republicans are pushing requirements for at least 20 hours of work per week to qualify for Medicaid, food stamps and direct cash payments. They also want to increase the age limit for work requirements from 49 to 55.
“Remember what we’re talking about — able-bodied people without dependents,” Mr. McCarthy said. “It’s 20 hours per week. You [can] go to school or whatever else. … Work requirements help people get a job.”
Democrats have made expanding work requirements for food stamps and Medicaid a red line in the negotiations, arguing that the U.S. just emerged from the pandemic and still suffers high inflation.
“We must reject any bill that would increase poverty and take health care away from millions of Americans,” said Sen. Bob Casey, Pennsylvania Democrat.
• Haris Alic can be reached at halic@washingtontimes.com.
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