Negotiations over raising the debt limit before a potential breach in June or July have made little progress, but the issue is still dominating Capitol Hill and making it more difficult for any other legislative priorities.
President Joe Biden recently met with House Speaker Keven McCarthy, R-Calif., on the issue. Both sides said the meeting was productive, but it appears the talks did not involve much substance. The White House said Biden simply reiterated his position that the debt ceiling is not subject to negotiation, while McCarthy refrained from laying out any specific demands besides reiterating a general desire to curb government spending without cuts to Medicare or Social Security funding.
Republicans have discussed various options, including “recapturing” an estimated $100 billion in uncommitted pandemic money, instituting work requirements on social welfare programs, reducing fraud in certain programs by requiring Social Security numbers, and cutting EPA and environmental justice programs. Tax increases appear unlikely to be part of negotiations; Republicans oppose them, and Democrats are seeking to avoid policy changes associated with any increase in the debt limit.
Negotiations on the debt limit are likely to intensify in the coming months — and the focus on the fight has sapped any momentum for a potential extenders deal in the coming months.
Dustin Stamper is a managing director in Grant Thornton’s Washington National Tax Office and leads the tax legislative affairs practice for the firm.
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