Treasury Secretary Janet Yellen has said the federal government could run out of money to pay its bills as soon as June 5 if President Joe Biden's team and House Speaker Kevin McCarthy's Republican debt negotiators cannot reach an agreement to lift the nation's borrowing limit.
Despite the rapidly approaching deadline, members of the House were allowed to leave Washington, D.C., for the Memorial Day weekend. Lawmakers are tentatively not expected back at work until Tuesday, just two days from the June 5 "X-date."
Rep. Katherine Clark, the Democratic whip in the U.S. House, visited Revere on Friday, where she blamed the crisis on a faction of the Republican party.
"Key House Republicans have brought us here today to the edge of catastrophe. We are days from a MAGA default that would devastate families in Revere, across the Commonwealth and across the country," Clark said.
Defaults for the federal government could have damaging effects throughout the US and the international economy.
Anxious retirees and social service groups are among those already making default contingency plans. The next batch of Social Security checks is due to go out next week.
"They have taken America hostage. Not the White House. Not Congress. Not Democrats. The American people. Our veterans. Our teachers. Our families. Our seniors. The hungry. The sick. It's everyday people who are on the hook for the Republicans' recklessness," Clark said.
“We made progress last night; we’ve got to make more progress now,” McCarthy said. "We know it's a crunch.”
Democrat Biden and the Republican speaker are narrowing differences, laboring to lock in details on a two-year agreement that would restrain federal spending and lift the legal borrowing limit past next year's presidential election.
Any deal would need to be a political compromise, with support from both Democrats and Republicans to pass the divided Congress.
While the contours of the deal have been taking shape to cut spending for 2024 and impose a 1% cap on spending growth for 2025, the two sides remain stuck on various provisions. The debt ceiling, now at $31 trillion, would be lifted for two years to pay the nation's incurred bills.
A person familiar with the talks said the two sides were “dug in” on whether or not to agree to Republican demands to impose stiffer work requirements on people who receive government food stamps, cash assistance and health care aid.
Yet both Biden and McCarthy expressed optimism heading into the weekend that the gulf between their positions could be bridged.
In remarks at the White House on Thursday, Biden acknowledged, “The only way to move forward is with a bipartisan agreement.”
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