McCarthy on debt ceiling talks: We’re at ‘this breaking point’ but have ‘some progress’

Speaker Kevin McCarthy (R-Calif.) on Wednesday said debt ceiling talks are at a “breaking point,” with the House GOP and the White House at an impasse over whether to lower federal spending, even as he also said negotiations were going “a little better.”

“I’ve been very clear, I will not put a bill on the floor that spends more money this year than next year than this year,” McCarthy said on Fox Business on Wednesday, calling for measures like rescinding unused COVID-19 funds and beefing up work requirements on public assistance programs.

“It is very clear, we are at this breaking point,” McCarthy said. “The Democrats haven’t passed anything.”

McCarthy’s comments came as his top deputies, Reps. Garret Graves (R-La.) and Patrick McHenry (R-N.C.) went to the White House on Wednesday to meet with President Biden’s designated negotiators.

At the Capitol later on Wednesday, McCarthy said there was “some progress” during the day’s talks, which was a “very positive” development.

When a reporter later said it seemed like negotiators were nearing a deal, McCarthy responded, “I just said things are better than they were yesterday.”

“I’ve been able to find some ways to probably get to fruition on a couple” of the issues, McCarthy also told reporters.

Graves returned from the White House meeting declining to comment.

Treasury Secretary Janet Yellen has said the U.S. could default on its debt obligations as soon as June 1, giving Congress just about a week to raise the limit.

McCarthy said that a deal is needed this week to meet that deadline.

McCarthy on Fox Business praised White House negotiators Steve Ricchetti and Shalanda Young as “highly intelligent,” and said there has been “nothing but professionalism.”

“Any negotiation, it blows up, it comes back together,” McCarthy said.

But McCarthy said Democrats are still opposing spending caps. Republicans proposed capping discretionary spending at fiscal year 2022 levels while allowing for 1 percent growth per year for 10 years.

McCarthy said that markets should not be reacting “at all” to the debt limit talks because there is “cash flow coming in every day.”

“I would not, if I was in the markets to be afraid of anything in this process. I wouldn’t scare the markets in any shape or form. We will come to an agreement,” McCarthy said.

Mychael Schnell contributed.