Biden says debt deal ‘very close’ even as both sides distance on job demands

Work requirements for federal food aid recipients have emerged as the final sticking point in negotiations over the looming debt crisis, even as President Joe Biden said Friday that a deal was “very close.”

Biden’s optimism came as the deadline for a potentially catastrophic default was pushed back to June 5 and talks between the White House and Republicans looked set to drag on for another frustrating week to raise the debt ceiling. Both parties have suggested that one major obstacle is GOP efforts to boost work requirements for food stamp recipients and other federal assistance programs, a longtime Republican goal that Democrats have strongly opposed.

Even as they approached the cost frame, each side seemed overwhelmed by the demands of the job. White House spokesman Andrew Bates called the GOP proposals “cruel and senseless” and said Biden and Democrats would oppose them.

Louisiana Rep. Garrett Graves, one of House Speaker Kevin McCarthy’s negotiators, was blunt when asked if Republicans could drop the issue. “Hell no, no way,” he said.

A later “X-date,” laid out in a letter from Treasury Secretary Janet Yellen, set the risk of a devastating default four days later than earlier forecasts. Still, Americans and the world were anxiously watching the edge of the talks, which could throw the US economy into chaos and undermine the world’s confidence in the country’s leadership.

Still, Biden was upbeat as he departed Memorial Day weekend at Camp David, declaring: “It’s very close, and I’m optimistic.”

At the Capitol, Republicans talking to Biden’s team at the White House, the president said. “Negotiations are underway. I hope we will know by tonight if we can do a deal.” But the deal was not done when McCarthy left the Capitol Friday night.

In a stark warning, Yellen said failure to act before the new deadline would “cause severe hardship to American families, damage our global leadership position and raise questions about our ability to protect our national security interests.”

Worried retirees and others were already making contingency plans for missed checks with Social Security payments due next week.

Biden and McCarthy, a Republican, appear to be at loggerheads over a two-year budget-cutting deal that would also extend the debt limit until 2025 after the next presidential election.

But negotiations over proposed work requirements for recipients of Medicaid, food stamps and other assistance programs appeared to be deadlocked Friday afternoon.

Biden said Medicaid work requirements would be a non-starter. But he initially seemed open to possible changes to food stamps, now known as the Supplemental Nutrition Assistance Program, or SNAP.

The Republican proposal would save $11 billion over 10 years by raising the maximum age for existing standards that require able-bodied adults who do not live with dependents to work or attend training programs. While current law applies those criteria to recipients under 50, the House bill would raise the age to include adults 55 and under. The GOP proposal would also reduce the number of exemptions states can grant to certain recipients subject to those requirements.

Biden’s stance on SNAP work requirements hardened on Friday, when Speaker Bates said House Republicans were threatening to trigger an unprecedented recession “if they can’t put food in the mouths of hungry Americans.”

Any deal would have to be a political compromise that would support both Democrats and Republicans to pass a divided Congress. Failure to raise the borrowing limit, now at $31 trillion, to pay off the nation’s debt would send shockwaves through the US and global economy.

But many hard-right Trump-aligned Republicans in Congress have long been skeptical of the Treasury’s projections, and they are pressing McCarthy to hold on.

When negotiations began another late night, one of the negotiators, R. Patrick McHenry, RN.C., called Biden’s comments a “reliable sign.” But he also warned there were still “sticking points” standing in the way of a final agreement.

While the outline of the deal is shaping up to cut spending for 2024 and cap spending growth at 1% for 2025, the two sides remain stuck on different provisions.

House Republicans pushed the issue to the curb in a risky political bravado by leaving town over the Memorial Day holiday. Lawmakers don’t have preliminary work until Tuesday, but now their return is uncertain.

Weeks of talks between Republicans and the White House failed to reach an agreement, in part because the Biden administration resisted negotiating with McCarthy on the debt limit, arguing that the country’s full faith and credit should not be used as leverage to remove other party priorities. .

“We have to spend less than we spent last year. That’s the starting point,” McCarthy said.

One idea is to set key budget numbers, but then add a “fallback” provision to make cuts if Congress fails to meet the new goals in its annual appropriations process.

Lawmakers, however, are confident of returning about $30 billion in unspent COVID-19 funds now that the pandemic emergency has officially been lifted.

McCarthy promised lawmakers he would abide by the rule of releasing any bill 72 hours before a vote. The Democratic-controlled Senate has vowed to move quickly to send the package to Biden’s desk.


Associated Press writers Mary Claire Jalonik, Stephen Groves, Farnoosh Amiri, Seung Min Kim and Kevin Freking and videographer Rick Gentillo contributed to this report.

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