Debt Ceiling: Two Critical Issues in Focus as McCarthy Says Sides Remain ‘Far Apart’

Negotiators on the debt ceiling are progressing on two topics that could be critical to a final deal, even as the Speaker of the House said the two sides remain far apart.

A possible compromise in the upcoming weeks depends on whether the government should eliminate the red tape required to start new energy development projects and require more work from low-income Americans.

A note of caution on Monday came from House Speaker Kevin McCarthy, who told reporters at the Capitol that “I still think we are far apart” on the talks and the other side was “not talking anything serious.”

McCarthy’s cautious comments contrasted with President Joe Biden, who this weekend told reporters, “I really think there’s a desire on their part, as well as ours, to reach an agreement, and I think we’ll be able to do it.”

During a visit to Philadelphia, the president confirmed leaders would be meeting Tuesday.

The most significant advance over the weekend was a signal from President Biden that he is open to finding room on the controversial issue of accessing social programs. Republicans are pushing to impose new work minimums on Americans participating in federal programs like Medicaid, SNAP (formerly known as food stamps), and Temporary Assistance for Needy Families (TANF).

According to the GOP proposal, benefits would continue only if the recipients worked longer hours.

Speaker McCarthy called them common-sense measures designed to “rebuild the workforce.” During his conversation with reporters, the president noted, “I voted for tougher aid programs that’s in the law now, but for Medicaid, it’s a different story.”

Michael Kikukawa, White House spokesman, further explained the White House position in a statement, “The President has been clear that he will not accept proposals that take away people’s health coverage [or] policies that push Americans into poverty.”

The requirements are a high priority for a group of conservative GOP members in the House who pushed to include measures in the Republican debt-ceiling proposal.

It remains unclear whether the changes will go far enough to satisfy Republicans, with the Speaker emphasizing Monday that he would stand firm on stricter work requirements for receipt of government benefits.

Energy-permitting reform remains part of the discussion

Another issue is making some progress in efforts to make it less complicated for energy projects to get off the ground.

Energy-permitting reform remains part of the conversation, says a source familiar with negotiations on Monday, with “the White House hopeful for a bipartisan agreement.”

Additionally, McCarthy and other GOP members have called energy their top concern and passed a group of measures in a bill called HR1, which also included the debt ceiling proposal.

Other negotiation areas include the bill’s central spending issues, including a possible cap on federal spending and what money can be returned from Covid-19 relief bills.

There is a small space for compromise on spending caps. Multiple Monday reports say the issue continues to be Republicans seeking budget caps for the next decade, with Democrats pushing for two years of austerity measures instead.

Several Biden administration officials gave encouraging words over the weekend, with Treasury Secretary Janet Yellen saying she’s “hopeful” and Lael Brainard, National Economic Council director, adding talks have been “serious.”

The president said Sunday: “I remain optimistic because I’m a congenital optimist.”