US debt ceiling talks at standstill as Republicans ‘pause’ negotiations

Disagreement with White House over spending cuts the sticking point

Crucial talks in Washington aimed at preventing a US debt default in the weeks ahead have come to a standstill. The talks between the White House and Republicans who control the House of Representatives broke up suddenly on Friday in what appears to be a disagreement over spending cuts.

Republicans are seeking significant reductions in US government spending in return for facilitating an increase in the official amount of money which the US government is permitted legally to borrow. Without a deal the US government could run out of money within the next fortnight, leading to a potential debt default which would plunge both the American and world economy into turmoil.

Republican speaker of the House of Representatives Kevin McCarthy told reporters on Capitol Hill: “We’ve got to get movement by the White House and we don’t have any movement yet. We’ve got to pause (the talks).”

The New York Times reported that Mr McCarthy suggested that a significant sticking point in the negotiations was over how to cap spending by the federal government which Republicans are seeking. “We can’t be spending more money; we have to spend less than we spent the year before,” Mr McCarthy said.


A White House official, speaking anonymously, told US media on Friday that there were “real differences” between the parties and that further talks would be difficult.

On Thursday both the White House and Republicans had indicated that progress was being made in the talks, although the president on Friday night left early a dinner of G7 leaders in Japan to be briefed by his negotiating team in Washington.

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Both parties in the talks were coming under pressure from some on their own side about making concessions. On Thursday the far right Republican freedom caucus members of Congress had urged McCarthy to end the talks until the US senate adopted a bill which the House of Representatives had passed recently raising the debt ceiling limit in return for spending cuts

On the other hand. a group of Senate Democrats called on the president to invoke the US constitution’s 14th amendment to avoid a debt default if negotiations with republicans did not succeed. The senators said that while they appreciated Mr Biden’s efforts to find a bipartisan deal to lift the debt ceiling Republicans in Congress were “not acting in good faith”.

“We write to urgently request that you prepare to exercise your authority under the 14th amendment of the constitution, which clearly states: ‘the validity of the public debt of the United States ... shall not be questioned’,” they said.

Liberals in Congress are particularly concerned at any concessions to Republicans in relation to work requirements for access to some social programmes.

The Republicans’ debt limit bill, approved last month along party lines, would impose stricter work requirements for beneficiaries of food stamps, Medicaid and a programme which provides financial assistance to those on low incomes with children known as the temporary assistance for needy families.

The White House is understood to be seeking a two-year deal on the debt ceiling which would mean the issue would not have to be addressed again until after the 2024 presidential election.

Even if a deal is reached, politicians will be in a race to get it enacted by the beginning of June when the US could reach its borrowing limit.

At present the US government is limited by law to borrowing no more than $31.4 trillion (€28.5 trillion). The White House has argued that a US debt default would “threaten eight million jobs, a recession, retirement accounts and social security and Medicare”.

Martin Wall

Martin Wall

Martin Wall is Washington Correspondent of The Irish Times. He was previously industry correspondent