No Deal Today — We’re Headed Into Overtime
Author: Greg Valliere
May 16, 2023
WE TALKED WITH A STAFFER yesterday who said 50% of a deal in principle is “close to done.” But he added that the other 50% is still far from resolved. Democrats on the left are increasingly opposed to deep spending cuts, while Republicans on the right insist on spending caps lasting for several years.
THERE’S AGREEMENT on clawing back unspent Covid funds and imposing work requirements on recipients of federal aid. And the White House apparently will agree to across-the-board spending restraint, reducing the rate of growth in federal outlays.
KEY MEMBERS OF BOTH PARTIES will meet with President Biden late today, and the negotiators probably will pledge to continue talks while Biden is in Asia for nearly a week (assuming he doesn’t cancel some of the trip, citing the debt ceiling crisis).
BIDEN AND ALL OF THE PLAYERS agree that time is running out; chances of getting a deal by Janet Yellen’s June 1 deadline still look unlikely. Dusting off the 14th amendment to the Constitution to evade the debt ceiling is still an option — a sign of desperation, because the negotiators are so far apart. Both houses will leave town on May 26 for the Memorial day recess, and both won’t be in session simultaneously until June 6.
WE STILL THINK, NERVOUSLY, that default can be avoided, but it will take an extension for many weeks to iron out a deal involving dozens of major spending changes. So we’re headed into uncharted waters, with a once-obscure provision in the Constitution becoming a life preserver. A deal today? No way, we’re going to overtime.
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