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No Signs of Progress From White House or Republicans in ‘Tough’ Debt Ceiling Talks

Representatives of U.S. President Joe Biden and congressional Republicans ended another round of debt ceiling talks on Tuesday with no signs of progress as the deadline to raise the government’s $31.4 trillion borrowing limit or risk default ticked closer.

The two parties remain deeply divided about how to rein in the federal deficit, with Democrats arguing wealthy Americans and businesses should pay more taxes while Republicans want spending cuts.

White House negotiators Shalanda Young, director of the Office of Management and Budget, and senior White House adviser Steve Ricchetti met with their Republican counterparts for about two hours. They left without making substantive comments to the media.

Treasury Secretary Janet Yellen has warned that the federal government could no longer have enough money to pay all its bills as soon as June 1, which would cause a default that would hammer the U.S. economy and push borrowing costs higher.

The two sides still disagree on spending, and it was not clear when talks would resume, said Republican Representative Patrick McHenry, who chairs the House Finance Committee.

White House spokesperson Karine Jean-Pierre called the talks “incredibly tough.”

“Both sides have to understand that they’re not going to get everything that they want,” Jean-Pierre said at a briefing. “And what we’re trying to get to is a budget that is reasonable, that is bipartisan, that Democrats and Republicans in the House and Senate will be able to vote on and agree on.”

Global markets on edge

The lack of clear progress continued to weigh on Wall Street with U.S. stocks sharply lower on Tuesday and global markets on edge.

Democrats want to freeze spending for the 2024 fiscal year that begins in October at the levels adopted in 2023, arguing that would represent a spending cut because agency budgets won’t match inflation. The idea was rejected by Republicans, who want spending cuts.

Biden wants to cut the deficit by raising taxes on the wealthy and closing tax loopholes for the oil and pharmaceutical industries. McCarthy said he will not approve tax increases.

McCarthy told reporters on Monday that he expected to talk with Biden daily at least by telephone.

If and when Biden and McCarthy reach a deal, they will still need to sell it to their caucuses in Congress. It could easily take a week to pass a deal through the House and Senate, which would both need to approve the bill before Biden could sign it into law.

‘Why is June 1 the drop dead?’

Hard-line Republicans and progressive Democrats both voiced anger at the idea of compromise.

Democratic Representative Pramila Jayapal, who chairs the 101-member Congressional Progressive Caucus, said “the vast majority” of the group’s members would oppose any deal that included spending cuts or new work requirements for federal benefit programs for low-income Americans, both of which are major Republican demands.

Some hard-line members of the Republican House Freedom Caucus on Tuesday said they were skeptical of how firm the June 1 deadline is. Treasury has said the U.S. could run short of cash as soon as June 1, or perhaps in the days following.

“Secretary Yellen needs to not only testify, but in writing, she needs to justify her dates that she’s given. Why is June 1 the drop dead?” Republican Representative Ralph Norman said.

Democrat Representative Hakeem Jeffries — the top Democrat in the House — dismissed that skepticism as unfounded.

“The June 1 date is a real one. Secretary Yellen continues to make that clear,” Jeffries told reporters.

Unless Congress raises the debt ceiling and allows the federal government to borrow money to pay its bills, the United States could default on its obligations, potentially tipping the nation into recession and plunging global financial markets into chaos.

Any deal to raise the limit must pass both chambers of Congress, and therefore hinges on bipartisan support. McCarthy’s Republicans control the House 222-213, while Biden’s Democrats hold the Senate 51-49.

Despite the gridlock, the two sides have found some common ground on several areas, including permit reform that will help energy projects move forward.

On Monday, McCarthy said including some permitting reforms in the debt deal would not solve all of the related issues and that talks on further reforms could continue later, declining to address transmission for renewable energy.

The two sides are also discussing clawing back unused COVID-19 relief funds and imposing stricter work requirements on two popular public benefit programs aimed at helping Americans out of poverty.
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South Carolina Republicans Hear Pitches From 2024 Candidates, Reelect State Party Chairman

South Carolina Republicans on Saturday selected Drew McKissick as their chairman for a fourth term at a convention where some of the party’s 2024 presidential hopefuls made pitches to voters in the first-in-the-South primary state. 

McKissick has led the party since 2017 in a state where Republicans hold all statewide-elected positions, all but one U.S. House seat, and control of both legislative chambers. He defeated three challengers. Party officials said in a release that under McKissick’s leadership, “more Republicans than ever before” had won elections. 

Neither of South Carolina’s presidential contenders, former United Nations Ambassador Nikki Haley and U.S. Senator Tim Scott, attended the gathering in Lexington, a suburb of Columbia, the capital. 

Scott, who entered the race Friday, sent a video that was played for delegates, and a political action committee that backs him sponsored a breakfast for them. 

“The GOP, the great opportunity party, is in fact the dominant party in our great state, because of people just like you,” said Scott. He encouraged activists to come to his formal campaign launch event Monday in North Charleston so they could be “a part of South Carolina — and hopefully American — history.” 

If elected, Scott would be the first Black Republican president. 

Haley, a former governor who kicked off her campaign in February, did not appear in person or via video. She did get a mention from the rostrum when a McKissick rival noted that Haley had resigned as governor before the end of her second term to join the Trump administration as U.N. envoy. 

Several Republicans in race

The Republican Party’s 2024 field is expanding, with Scott, Haley, former President Donald Trump and former Arkansas Governor Asa Hutchinson already running. Another hopeful, entrepreneur and “anti-woke” activist Vivek Ramaswamy was the sole candidate to address the convention in person. 

In a video, Trump said that “now is the time to complete our mission and finish what we started” and “evict Joe Biden from the White House.” A video from Never Back Down, a super political action committee supporting Florida Governor Ron DeSantis as he prepares to enter the race, showcased DeSantis’ background, including his military service and ongoing disputes with the Walt Disney Co., saying the governor has “refused to let Disney push us around.” 

This past week, Disney announced it was scrapping plans to build a new campus in central Florida and relocate 2,000 employees from Southern California to work in digital technology, finance and product development. The decision followed a year of attacks from DeSantis and the Florida Legislature because the company opposed a state law that bans classroom lessons on sexual orientation and gender identity in early grades. Disney filed a First Amendment lawsuit against DeSantis and other officials last month. 

Top stop

Given its prominent status on the nomination calendar, South Carolina for months has drawn a number of Republican presidential contenders. 

Trump visited in January to roll out his South Carolina leadership team, which includes Governor Henry McMaster and U.S. Senator Lindsey Graham. DeSantis made his debut trip last month, drawing hundreds to two events. Former Vice President Mike Pence has come numerous times to a state where support from white evangelical Christians is critical. 

Trump’s support in the state has remained high since his South Carolina primary victory helped propel him to the 2016 nomination. But Tyler J. Corn, who heads up the Greater Spartanburg Young Republicans, said he’s somewhat dubious that those who say they support the former president will vote for him when it comes time to do so next year. 

“I think there’s a lot of people that realistically say they love Donald Trump who probably end up voting for Ron DeSantis, because I think a lot of [them] believe that he’s a proven winner, and the president, they’re a little bit more concerned about that,” Corn said on the sidelines of the convention. “I’ve even heard people say, ‘Well I love Donald Trump, I just don’t love the way he always says things.’ And I haven’t heard that complaint with Ron DeSantis yet.”  
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Head of Taiwanese Legislature Talks Self-Defense in Washington

The head of Taiwan’s legislature visited Washington this week, where he met with top U.S. lawmakers and told audiences that the Taiwanese people are determined to defend themselves should Beijing try to invade.

During a time when the island is under greater political and military pressure from Beijing, You Si-Kun, head of Taiwan’s Legislative Yuan, met with members of the House committee focused on China, as well as with former Speaker Nancy Pelosi who said they discussed security and democracy.

House Foreign Affairs Committee Chairman Michael McCaul said the two discussed “opportunities to work toward a tax agreement and expediting military sales to Taiwan.” The United States is expected to move forward soon with sending $500 million worth of weapons aid to Taiwan.

A will to defend itself

Speaking at a Hudson Institute event, You emphasized how the will to defend itself is a part of Taiwan’s DNA and that the country will unite across political party lines should it be invaded.

“Support from friendly nations is critical, given China’s size,” You told VOA in an interview Tuesday. “But the Taiwanese people can be counted on to do everything they can to fight the invaders and preserve their freedom and way of life.”

To make his point, You referenced when Taiwan was ceded to Japan by the Qing court in 1895, which resulted in Japanese occupation of Taiwan that lasted 50 years, until the end of World War II.

You recalled how it took Japanese forces more than five months to pacify the island after it was officially ceded to Tokyo, at a time when Taiwan had no official government, no armed forces, and no international support.

In the decades since, Taiwan has seen waves of migration from mainland China as well as the rise of a democratic government, which You says have strengthened the island’s collective sense of self-defense.

Sunflower protests

He recalled the Sunflower protests in 2014, when Taiwanese youths came out in huge numbers to protest a trade deal between Taiwan and mainland China that they feared would disadvantage Taiwan economically and politically.

“It wasn’t just youths whose ancestors had been in Taiwan for multiple generations that came out to protest, but across the board,” said You.

That solidarity, he said, will happen again should Beijing decide to invade Taiwan, he said, “even while we [people from different political parties] have our disagreements in peacetime.”

China’s intense military maneuvers in and around Taiwan’s airspace and maritime territory in recent months could have at least two aims, You told VOA.

One is to intimidate the population and pin the tension on the ruling Democratic Progressive Party in hopes of directing votes toward candidates portrayed as “peace-loving,” he said. “They could also be rehearsing their armed forces, ships and aircraft, especially since they have not fought in an active war for decades,” You added as the second aim.

Before the delegation returned to Taiwan, You and the other legislators also met with Enes Kantor Freedom, the Turkish-American basketball star-turned-advocate of freedom for people not only in his birth country, but around the world, including Hong Kong, Tibet, Xinjiang, and Taiwan.
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US Debt Limit Talks Halted Again Amid ‘Real Differences’

Debt limit talks halted again late Friday at the U.S. Capitol shortly after resuming, another sudden turn of events after negotiations had come to an abrupt standstill earlier in the day when Republican House Speaker Kevin McCarthy said it was time to “pause” negotiations, and a White House official acknowledged there are “real differences.”

Top Republican negotiators for McCarthy exited the brief meeting shortly after talks restarted Friday evening. They said there were no further negotiations planned for Friday and they were uncertain on next steps. But a top White House adviser to President Joe Biden said they were hopeful for a resolution. The negotiators are racing to strike a budget deal to resolve the standoff.

“We reengaged, had a very, very candid discussion, talking about where we are, talking about where things need to be, what’s reasonably acceptable,” said Rep. Garret Graves, R-La., a top McCarthy ally leading the talks for his side.

As the White House team left the nighttime session, counselor to the president Steve Ricchetti, who is leading talks for the Democrats, said he was hopeful for an outcome. “We’re going to keep working,” he said.

Biden’s administration is reaching for a deal with Republicans led by McCarthy as the nation careens toward a potentially catastrophic debt default if the government fails to increase the borrowing limit, now at $31 trillion, to keep paying the nation’s bills.

Earlier in the day, McCarthy said resolution to the standoff is “easy,” if only Biden’s team would agree to some spending cuts Republicans are demanding.

The biggest impasse was over the fiscal 2024 top-line budget amount, according to a person briefed on the talks and granted anonymity to discuss them. Democrats staunchly oppose the steep reductions Republicans have put on the table as potentially harmful to Americans.

“We’ve got to get movement by the White House, and we don’t have any movement yet,” McCarthy, R-Calif., told reporters at the Capitol. “So, yeah, we’ve got to pause.”

The White House official, who was granted anonymity to talk about the private discussions, had said at that time there are “real differences” between the parties on the budget issues and further “talks will be difficult.”

Wall Street turned lower as negotiations came to a sudden halt, raising worries that the country could edge closer to risking a highly damaging default on U.S. government debt.

The president, who has been in Japan attending the Group of Seven summit, had no immediate comment. Biden had already planned to cut short the rest of his trip, and he is expected to return to Washington on Sunday.

Negotiators met Friday for a third day behind closed doors at the Capitol with hopes of settling on an agreement this weekend before possible House votes next week. They face a looming deadline as soon as June 1, when the Treasury Department has said it will run out of cash to pay the government’s incurred debt.

McCarthy faces pressures from his hard-right flank to cut the strongest deal possible for Republicans, and he risks a threat to his leadership as speaker if he fails to deliver. Many House Republicans are unlikely to accept any deal with the White House.

The internal political dynamics confronting the embattled McCarthy leaves the Democrats skeptical of giving away too much to the Republicans and driving off the Democratic support they will need to pass any compromise through Congress.

Markets had been rising this week on hopes of a deal. But that shifted abruptly Friday after negotiators ended late morning an hour after they had begun.

The S&P 500 went from a gain of 0.3% to a loss of 0.1% and the Dow Jones Industrial Average went from a gain of 117 points to a loss of about 90 points.

As Republicans demand spending cuts and policy changes, Biden is facing increased pushback from Democrats, particularly progressives, who argue the reductions will fall too heavily on domestic programs that Americans rely on.

Some Democrats want Biden to invoke his authority under the 14th amendment to raise the debt ceiling on his own, an idea that raises legal questions and that the president has so far said he is not inclined to consider.
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