Debt Ceiling Talks Hit an Impasse

The snag is seen as a negotiating ploy, though the clock is ticking to reach a deal
By John Johnson,  Newser Staff
Posted May 19, 2023 12:34 PM CDT
Debt Ceiling Talks Hit an Impasse
Speaker of the House Kevin McCarthy, R-Calif.   (AP Photo/J. Scott Applewhite)

On Thursday, House speaker Kevin McCarthy suggested high-stakes talks for a deal on the debt ceiling were going well. On Friday, a different tone: One of the Republican negotiators said talks were now on "pause" and accused the White House of "unreasonable" demands, reports the Hill. “We decided to press pause because it’s just not productive,” Rep. Garret Graves told reporters. And McCarthy himself confirmed the impasse soon after: “We’ve got to get movement by the White House, and we don’t have any movement yet," he said. "So, yeah, we’ve gotta pause."

The Washington Post adds some context, noting that the pause is "widely seen on Capitol Hill as a potential negotiating ploy from leaders aimed at assuring their bases that they are fighting aggressively for their sides’ priorities." Still, the news rattled the markets, at least temporarily, with the Dow quickly falling 300 points. However, the Dow then cut much of that loss when Fed chief Jerome Powell suggested the central bank may not have to cut rates as aggressively as feared to tame inflation, per CNBC. The Dow was down about 80 points about 1:30pm Eastern.

A White House official also confirmed the impasse, telling the Post: “A path to a reasonable bipartisan budget agreement is still possible as long as both sides recognize that they won’t get everything they want and compromise is necessary." McCarthy's view on that: “Look, we can’t be spending more money next year,” he said, per the AP. "We have to spend less than we spent the year before. It’s pretty easy.” As of Friday afternoon, there was no speculation on when the two sides might sit down again. "Playing by ear," said White House adviser Steve Ricchetti, per the Wall Street Journal. The Treasury Department has warned that the US might not be able to pay its bills for the first time as of June 1. (More debt ceiling stories.)

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