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WASHINGTON — High-level talks on raising the overdraft limit resumed on Capitol Hill Friday night, hours after they were halted at noon when Republican negotiators stormed out of the room, blaming the White House for stalling the discussions.
“We’re going back to the room tonight,” Speaker of the House Kevin McCarthy told Fox Business moments before spotting the negotiators returning to the room where the talks were happening.
“But it’s totally frustrating in the event that they need to walk right into a room and think we will spend extra money next 12 months than we did this 12 months. This isn’t right. And that is not going to occur,” McCarthy said.
The talks lasted about two hours, breaking up for the evening around 8:00 p.m. EST.
One of the most difficult sticking points in the talks was the issue of spending caps, a key GOP demand but a red line for a major Democratic bloc.
While the White Home is pushing for a debt ceiling increase that will thrust back one other deadline after the 2024 presidential election, Republicans are pushing for a spending cap for next 12 months that goes beyond the current cap and effectively pushes government spending back to 2022 levels.
“Let’s spend less, let’s take back the Covid money we didn’t spend… the job requirements… let’s do some permitting reform… I feel we could probably find a fairly good deal to maneuver forward,” McCarthy said, outlining the demands of the Republican Party, along with spending caps.
Keeping their caucuses together has turn into harder for party leaders this week – no less – as opposition to any compromise mounted amongst blocs of conservative Republicans and progressive Democrats
Any deal to boost or suspend the debt limit will should be passed in each the House of Representatives and the Democratic-controlled Senate, and key lawmakers in each parties have admitted that a possible compromise bill may very well be unacceptable to hardliners.
“There are real differences between the parties on budget issues, and talks might be difficult,” a White House spokesman told NBC News after negotiations broke down. “The president’s team is working hard on a wise two-way solution that may get through the House of Representatives and the Senate.”
The pause in talks got here only a day after McCarthy said he was optimistic that Congressional negotiators could reach a deal in time to carry a vote in the House of Representatives next week.
“I see a way we are able to come to an agreement,” a California Republican told reporters on Thursday.
President Joe Biden is in Japan this weekend for the Group of Seven summit but cut short his trip to return home on Sunday to proceed negotiations.
The House and Senate kept their original plans to go away for the weekend on Thursday. The Senate isn’t expected to resume its deliberations until the last days of May.
But Senate Majority Leader Chuck Schumer, DN.Y., advised members to be able to return to the Capitol 24 hours prematurely.
Investors were watching Washington closely this week for any signs of progress in the months-long debt-ceiling impasse. Earlier this month, Treasury Secretary Janet Yellen identified June 1 as the earliest date the United States could run out of money to repay debts the government has already incurred.
The date was sooner than the White House or Wall Street had predicted and added a latest urgency to negotiations that had effectively stalled since February.
After Tuesday’s White House meeting with congressional leaders, Biden urged two of his closest aides to take over the talks, which had to date produced little progress.
McCarthy praised Biden’s selection of presidential aide Steve Ricchetti and director of the Office of Management and Budget Shalanda Young, calling the pair “extremely smart.”