McCarthy sends GOP negotiators to White House 8 days before potential default

He said they would "try to finish out negotiations" as a June 1 deadline looms.

ByRachel Scott, Lalee Ibssa , and Trish Turner ABCNews logo
Wednesday, May 24, 2023
McCarthy sends negotiators to White House ahead of potential default
House Speaker Kevin McCarthy told reporters he was sending his House Republican bargaining team to the White House "to try to finish out negotiations."

After three weeks of negotiations and eight days from a possible default, as of Wednesday there was still no breakthrough in talks to avert potential financial catastrophe as soon as June 1.

Shortly before noon, House Speaker Kevin McCarthy told reporters he was sending his House Republican bargaining team to the White House "to try to finish out negotiations."

"There's a number of places that we are still far apart," he said. "I mean, it didn't seem like it'd be this hard."

Lead GOP negotiator Rep. Patrick McHenry of North Carolina said he's "hopeful that we can get this resolved" as he left the Capitol, a notable shift from Tuesday night when he was clearly more frustrated. But he and his fellow negotiator Garrett Graves of Louisiana -acknowledged, there's little time left.

The House is set to leave Washington Thursday for a week-long Memorial Day recess, although members have been warned they could be called back.

The vote to raise the debt ceiling allows the Treasury Department to continue borrowing money to pay the nation's already incurred bills.

"Look, you can start counting the days and there's no question, we're getting to crunch time," said another GOP negotiator, Rep. Garrett Graves of Louisiana. "We've been trying to look at things differently, trying to come up with new ideas. We recognize the urgency here, but we also recognize the House with a solid package on the table that saves funds."

Earlier, as McCarthy made his way into the Capitol, ABC News Senior Congressional Correspondent Rachel Scott asked him where things stand.

"I still feel they're productive -- the talks," he said, but there were no signs the talk were any closer to a deal.

In fact, McCarthy said he has not spoken to President Joe Biden since Monday.

Both sides appear to be waiting for the other to blink.

"I'm hopeful that they come back that they realize what the American public is telling them as well, that you cannot have the highest percentage of debt and spend the most amount of money while you're getting the most amount of revenue in, that you got to change that behavior, just like you would do in any household," McCarthy said. "And I'm hopeful as they come, if they come back today that they realize that."

A default could send ripples around the globe if it were to come to fruition.

As the standoff over federal spending continued, the White House has offered to freeze spending while Republicans are demanding deep cuts, according to a source familiar with the discussions. McCarthy is "beholden" to MAGA extremists, the source said.

"Well, the point you have to make, here we are eight days away. Why are we here? The Democrats do not want to come off their spending addiction," McCarthy said.

Asked how much in federal spending Republicans want to cut, he said, "Well, that's part of negotiation. Democrats don't even want to spend less, they want to spend more, that's unreasonable," he said.

He again made it clear increasing tax revenue is not on the table.

"Find ways to eliminate the waste. And that's what we've been doing. That's why on February 1, I sat with the president. That's exactly what I said to him. We can't raise taxes, and what's he talking about now? We need to raise more because I want to spend more after you've already done that, you set all the records you want to set, once the Democrats took the majority, this is what they brought us. And in doing so they brought us inflation, hurting every family," he said.

Treasury Secretary Janet Yellen on Wednesday tripled down on her warnings that June 1 might be the day the U.S. could default on its debt, even, she said, if it's "hard to be precise" about what happens around that date.

Yellen, speaking at a Wall Street Journal forum, was reluctant to discuss a "day-after" scenario in the wake of a U.S. default but allowed that Treasury would have to be ready to prioritize some bills over others.

She said payment prioritization is "not operationally feasible" -- emphasizing how unprecedented a default would be.

ABC News' Lauren Peller, Justin Gomez and Chris Boccia contributed to this report.