US Debt Ceiling Talks On 'Pause'

Facts

• After both US Pres. Joe Biden and GOP leaders expressed optimism earlier this week, House Speaker Kevin McCarthy's (R-Calif.) lead negotiator, Rep. Garret Graves (R-La.), said Friday they've "decided to press pause" on debt-ceiling negotiations as "it's just not productive."¹
• This comes as a source close to the talks had said both sides had reached an "impasse" on several issues, including work requirements for welfare, caps on future spending growth, and budget cuts.²
• McCarthy had been optimistic on Thursday, even saying he believed negotiators could reach a deal in principle as early as the weekend. On Friday, however, he and his deputies switched gears, claiming White House officials were refusing to compromise on spending cuts.³
• Republicans are pushing for a $130B cut in the upcoming budget. Although Biden has considered expanding conditions on recipients of the Temporary Assistance for Needy Families program — an idea some Democrats have said is a "nonstarter" — he opposes other cuts on welfare programs or climate initiatives.²
• Meanwhile, the conservative House Freedom Caucus said Thursday that negotiations should stop until the Senate passes its April debt ceiling bill that proposes raising the debt limit in exchange for deep spending cuts and capping annual spending growth at 1% over roughly a decade.⁴
• While the pause is a setback in the effort to prevent defaulting on the debt — which could occur as soon as June 1— it's not yet clear whether this was a strategic move or a lasting blow to reaching an agreement.³

Sources: ¹ABC News, ²The Washington Times, ³New York Times, and ⁴Wall Street Journal.

Narratives

• Republican narrative, as provided by FOX News. Republicans are offering a very fair debt limit deal, one that distinguishes itself from past years of falsely promising to "balance the budget" in ten years. In exchange for raising the horrendously high debt by another $1.5T, all the GOP is asking for is that essential reforms be implemented. Rather than making serious efforts to negotiate, Biden is dangerously flirting with recycling the civil-war era 14th Amendment.
• Democratic narrative, as provided by Los Angeles Times. If Biden bypassed Congress to open the debt limit through the 14th Amendment, it doesn't mean he would become a budgetary tyrant, as only Congress can pass the budget. What it would mean is that once budget talks roll around, the GOP would be free to withhold funding and push for a government shutdown.

Predictions