Senate leaders blame each other for debt ceiling issue as aides negotiate privately.

Aides Resume Talks on Raising Debt Limit as Time Runs Out

Republicans and Democrats Continue to Clash Over Spending Cuts

Aides for top congressional leaders resumed talks on raising the nation’s debt limit behind closed doors, even as top Senate leaders continue to wage a messaging war one day after meeting with President Joe Biden. Time is running out to avoid a historic default, which Treasury Secretary Janet Yellen has warned could happen as soon as June 1.

Both sides agree that a default would be disastrous and should be avoided at all costs, but Republicans are using the prospect of default to leverage a host of spending cuts. Biden and the Democrats have decried the cuts and pledged not to budge.

Minor Signs of Progress Emerge

There are minor signs of progress that are emerging, however. Staff for Biden, McCarthy, Schumer, McConnell, and Jeffries met Wednesday afternoon for roughly two hours. They plan to meet again on Thursday ahead of a Friday meeting between Biden and the top congressional leaders. Democrats still insist that these negotiations are separate from those happening to raise the nation’s debt ceiling.

2011 Fiasco Looms Large

The last time the nation was this close to default was when there was a dispute in 2011. Congressional Republicans sought to pressure then-President Barack Obama to accept spending cuts in exchange for raising the debt limit. Fears of government default rocked the financial markets and led to an unprecedented downgrade of the nation’s credit rating. Ultimately, this forced a last-minute deal between the two parties. Senators on both sides of the aisle said that’s an outcome they hope to avoid.

Republicans and Democrats Continue to Clash Over Spending Cuts

Democrats are still refusing publicly to entertain Republicans’ spending cut demands. Senate Majority Leader Chuck Schumer (D-NY) is criticizing House Speaker Kevin McCarthy (R-CA), attempting to separate his actions from those of McConnell.

“Speaker McCarthy was the only person in the room who refused to take the default off the table,” Schumer said to reporters on Wednesday. “The one person standing in the way is Speaker McCarthy. President Biden said he would, Leader Jeffries said he would, I would, Leader McConnell, outside, he didn’t say anything in the room, but outside he too said we must avoid default.”

Biden May Be Open to Republicans’ Push to Take Back Unspent COVID-19 Relief

Biden has said he may be open to Republicans’ push to take back unspent COVID-19 relief, which amounts to less than $80 billion. The White House has also signaled it may be willing to pursue energy permitting reform, a debt limit priority for Republicans, according to aides close to negotiations.

Conclusion

As the deadline looms, the stakes are high for both parties. While there are some signs of progress, the negotiations remain contentious, with Republicans and Democrats continuing to clash over spending cuts. The hope is that a last-minute deal can be reached to avoid a repeat of the 2011 fiasco that nearly crashed the economy.