Debt ceiling: House about to take long weekend as default looms

Speaker Kevin McCarthy said he’s directed his negotiating team “to work 24/7 to solve this problem.”

Arriving at the Capitol, McCarthy, R-Calif., said that “every hour matters” in talks with President Joe Biden’s team as they work toward a budget deal. Republican are demanding spending cuts the Democrats oppose, and McCarthy said a deal could come together “at any time.”

But it’s clear the Republican speaker — who leads a Trump-aligned party whose hard-right flank lifted him to power — is now staring down a potential crisis.

Lawmakers are tentatively not expected back at work until Tuesday, just two days from June 1, when Treasury Secretary Janet Yellen has said the U.S. could start running out of cash to pay its bills and face a federal default.

Fitch Ratings agency placed the United States’ AAA credit on “ratings watch negative,” warning of a possible downgrade because of what it called the brinkmanship and political partisanship surrounding the debate over lifting the debt ceiling.

“This is a battle between extremism and common sense,” said Democratic Rep. Katherine Clark of Massachusetts, the minority whip.

The Republicans, she said, “want the American people to make an impossible choice: devastating cuts or devastating debt default.”

Weeks of negotiations between Republicans and the White House have failed to produce a deal — in part because the Biden administration never expected to be having to negotiate with McCarthy over the debt limit, arguing it should not be used as leverage to extract other partisan priorities.

McCarthy is holding out for steep spending cuts that Republicans are demanding in exchange for their vote to raise the nation’s borrowing limit. The White House has offered to freeze next year’s 2024 spending at current levels and restrict 2025 spending, but the Republican leader says that’s not enough.

“We have to spend less than we spent last year. That is the starting point,” said McCarthy, R-Calif.

Failure to raise the nation’s debt ceiling, now at $31 trillion, to pay the nation’s already incurred bills would risk a potentially chaotic federal default, almost certain to…