McCarthy sends letter to Biden urging more robust negotiations on the debt ceiling

By Alayna Treene, CNN

House Speaker Kevin McCarthy urged the White House in a letter sent Tuesday to start more robust negotiations over raising the nation’s borrowing limit, the first major action in weeks on either side of the debt ceiling issue.

McCarthy writes “with each passing day, I am incredibly concerned that you are putting an already fragile economy in jeopardy by insisting upon your extreme position of refusing to negotiate any meaningful changes to out of control government spending.”

McCarthy also proposed a series of places to start saving money including reclaiming unspent Covid-19 relief funds and strengthening work requirements for social programs.

However, there are limited relief funds left to draw upon. As of the end of January, some $90.5 billion in federal Covid-19 pandemic funding has not been obligated and has not expired, according to the US Government Accountability Office.

That’s out of the roughly $4.6 trillion in pandemic relief and recovery funding that Congress approved in six packages since early 2020.

The largest chunk of unexpired, unobligated money is in the Public Health and Social Services Emergency Fund, with smaller amounts left in the Pension Benefit Guaranty Corporation Fund, the Emergency Rental Assistance, Veterans Medical Care and Health Fund and other programs, according to the GAO.

Republicans have also long been eager to add or enhance work requirements in public assistance programs, which will limit enrollment and reduce the amount of federal funding needed. Already, one GOP lawmaker has proposed broadening the work mandate in the food stamps program.

Criticizing Biden

McCarthy walked his members through his letter during their GOP conference meeting. He said that the White House is doing everything it can to not negotiate in an attempt to extract maximum leverage in these talks when the deadline approaches.

McCarthy, shortly after the letter went out, criticized Biden for refusing to sit down with him.

“I’m concerned more than I’ve ever been about getting this debt ceiling done,” the California Republican said on CNBC, due to the lack of conversations and negotiations.

The White House, however, said it does not want to continue negotiations until Republicans are ready to offer a counter proposal to the White House’s budget request, which the Biden administration unveiled earlier this month.

In a statement, the White House said, “It’s time for Republicans to stop playing games, agree to a pass a clean debt ceiling bill, and quit threatening to wreak havoc on our economy. And if they want to have a conversation about our nation’s economic and fiscal future, it’s time for them to put out a Budget — as the President has done with his detailed plan to grow the economy, lower costs, and reduce the deficit by nearly $3 trillion.”

Republicans have yet to release their plan, as they continue struggle to find an agreement between the different factions in their narrowly divided majority.

However, McCarthy told CNBC that House Republicans are prepared to lay out $4 trillion in cuts in his next meeting with Biden.

“If the president would have a meeting I would have all the $4 trillion sitting there and provided to you … the difference, is he wants to play politics and I do not. I think we should be adults here,” he said.

McCarthy and his team still believe that they have the upper hand on the debt ceiling in the sphere of public opinion if they continue to show a pattern of trying to get Biden to sit down and he refuses to do so. It’s why McCarthy publicly said last week he’d asked Biden when they’d talk at the Friends of Ireland lunch — they want to show they are making the effort.

Republicans believe that if this does go to the brink, they need to show that they’ve tried repeatedly to talk.

Rep. Richard Hudson, the head of the campaign committee for Republicans, told CNN that while the politics should be secondary on debt ceiling, he does think McCarthy repeatedly asking for negotiations only to be rebuffed helps Republicans.

This story has been updated with additional developments.

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CNN’s Lauren Fox and Tami Luhby contributed to this report.