McCarthy tells House Republicans ‘nowhere near a deal’ on debt, spending

In a closed-door meeting with House Republicans Tuesday morning, Speaker Kevin McCarthy told his conference he and the White House are “nowhere a deal” on the debt limit and spending, urging members to hold firm, sources told ABC News.

“I need you all to hang with me on the debt limit,” McCarthy told members in the room, according to sources. “We are nowhere near a deal yet.”

He spoke with nine days to go until the June 1 “X-date,” when Treasury Secretary Janet Yellen has warned the government might risk default. On Monday, she stepped up that warning in a letter to congressional leaders, calling it “highly likely” the Treasury will run out of money in early June.

Working against that deadline, after meeting with President Joe Biden at the White House Monday, McCarthy called the talks “productive” not “progress.”

On his way back into the Capitol from meeting with Republicans Tuesday, ABC News asked McCarthy what progress has been made.

“Look, we met again last night. We’re not there yet,” he said.

About the time he spoke, White House negotiators arrived on Capitol Hill for another day of high-stakes talks. Biden adviser Steve Richetti, Office of Management and Budget Director Shalanda Young and Legislative Affairs chief Louisa Terrell arrived in a large black van and took a circuitous route to the speaker’s suite of offices.

“Just going to work. That’s it. Don’t have anything else. Off to do some more work!,” Ricchetti told reporters, joking that his team had probably had as little sleep as reporters.

They ignored all substantive questions about the talks and refused to say how long they would be in the Capitol.

“It really comes down to this,” McCarthy told ABC News. “Why are we in the problem we’re in? People have spent too much money. And the Democrats want to even spend more than we spent last year. That is not gonna happen,” he said.

McCarthy again outlined some of his demands: stricter work requirements for some federal aid programs and permitting reform for new energy projects.

“We’ve got to help people get back in the workforce with work requirements. You got to be able to have — cut this red tape where people can build again in America. There’s a lot of avenues out there that they’ve got to find. You’ve got to come to an agreement there,” he said.

“We can still finish this by June 1st in a timeline,” he said when asked about the deadline and just a few days left to sell any deal and get it passed by the House and Senate.

This, as members of both parties are raising objections, including House Republican hard-liners.

“Ninety-seven days the president didn’t want to meet, so we’re trying to condense everything in a short time frame. The House passed a bill and the Senate never passed one, so now it’s more difficult — what else do you have to negotiate with? From a lot of different perspectives. But we can still finish in time.”

When asked by reporters what he’d be willing to give up, McCarthy turned the tables back on Democrats.

“I passed a bill that raises the debt ceiling. So, what are you asking the senators? What are you asking the Democrats? What are you asking the president? Is the president going to hold fast and firm that he wants to spend more, create more inflation, make us more dependent on China? I don’t think so. I’m never going to give up on the American people. If you’ve watched anything about me, I won’t quit.”

House Democrats pushed back.

“Speaker McCarthy is beholden to the most extreme members of his conference,” chair of the House Democratic Caucus Rep. Pete Aguilar, D-Calif., told reporters.

“The speaker insists that there won’t be draconian cuts and yet continues to say the spending levels must go down. His position is simply untenable. Based on what Republicans have shown us with the appropriations bills, we are looking at a 30% cut across the board to the remaining domestic programs,” he said.