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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.
WASHINGTON — A top debt ceiling negotiator for House Speaker Kevin McCarthy said Friday it's time to “press pause” on talks as negotiations with the White House came to an abrupt standstill at the Capitol.
Rep. Garret Graves, R-La., tapped by McCarthy, R-Calif., to lead the talks, emerged from an hourlong session and said gaps remained between House Republicans and the Democratic administration.
“It’s time to press pause because it’s just not productive,” Graves told reporters.
He added that the negotiations have become “just unreasonable” and that it was unclear when talks would resume.
Wall Street turned lower as talks on raising the nation’s debt limit came to a sudden halt, raising worries that the country could edge closer to risking a highly damaging default on U.S. government debt.
President Joe Biden's administration is racing to strike 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 to keep paying the nation's bills.
White House negotiators declined to comment as they left the quick morning session.
Negotiators met 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.
Experts have warned that even the threat of a debt default would send shockwaves through the economy.
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. Markets had been rising this week on hopes of a deal.
Republicans want to extract steep spending cuts that Biden has so far refused to accept. Any deal would need the support of both Republicans and Democrats to find approval in a divided Congress and be passed into law.
Biden who has been in Japan attending the Group of Seven summit had already planned to cut short the rest of his trip. He is expected to return to Washington later Sunday.
Biden departed early from a dinner with G7 leaders in Hiroshima on Friday night. White House press secretary Karine Jean-Pierre said Biden planned to be briefed on the negotiations by his team Friday evening.
There was no immediate reaction from the White House to Graves’ comments.
Another Republican negotiator, Rep. Patrick McHenry of North Carolina, said, “There is a “serious gap” between the sides.
“We’re in a tough spot,” said McHenry, the chairman of the House Financial Services Committee, as he left the meeting.
As Republicans demand spending cuts and policy changes, Biden is facing increased pushback from Democrats, particularly progressives, not to give in to demands they argue will be harmful to Americans.
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.
A day earlier, the conservative House Freedom Caucus said there should be no further discussions until the Senate takes action on the House Republican bill that was approved last month to raise the debt limit into 2024 in exchange for spending caps and policy changes. Biden has said he would veto that Republican measure.
In the Senate, which is controlled by majority Democrats, the Republican leader Mitch McConnell has taken a backseat publicly, and is pushing Biden to strike a deal directly with McCarthy.
McConnell blamed Biden for having “waited months before agreeing to negotiate” with the speaker.
“They are the only two who can reach an agreement,” McConnell said in a tweet. “It is past time for the White House to get serious. Time is of the essence.”
Democrats are wary of any deal with Republicans, and particularly refuse the Republican proposal to protect defense and veterans accounts from spending caps, arguing that the cuts will fall too heavily on other domestic programs.
Republicans also want to impose stricter work requirements on government aid recipients. Biden has suggested he might be open to considering it, but Democrats in Congress have said is a nonstarter.
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Miller reported from Hiroshima, Japan. Associated Press Business Writer Stan Choe and writers Stephen Groves and Mary Clare Jalonick contributed to this report.
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