House Speaker Kevin McCarthy said Republicans may look to a 2019 spending deal reached by his predecessor and former President Donald Trump as a model for how to avert a potential debt ceiling crisis.
McCarthy said he told President Biden during a recent conversation that he'd like to sit down soon to address the concern, suggesting a cap on spending in exchange for temporarily raising the debt ceiling could be the way to go.
"I had a very good conversation with the president when he called me, and I told him I'd like to sit down with him early and work through these challenges," McCarthy said.
The nation's debt limit could be reached as early as this summer, raising concerns under a divided government and heavy partisan divisions of a U.S. financial default if a deal isn't reached by both parties in the coming months.
McCarthy's suggestion of compromise is also an indication of the tightrope he'll be walking between Democratic control of the White House and Senate, and the far-right House conservatives he had to wrangle to gain the speakership.
What a deal could look like
McCarthy said the 2019 deal between then-Speaker Nancy Pelosi and then-President Trump could provide direction for future talks.
Trump and Pelosi reached "a debt ceiling agreement, and it was a cap agreement for two years, to cap the spending and make those decisions — this is something that people have utilized," McCarthy said.
However, that deal was panned by conservatives and activist groups for allowing the debt limit to increase at all even with spending parameters. It lead some, such as Kentucky GOP Sen. Rand Paul, to declare the death of the Tea Party.
The threat of default lies ahead
The confrontations over the debt limit have increasingly raised the prospect of a U.S. financial default, including the last deal, which marked a protracted negotiation for a last-minute deal reached in December 2021 between top Senate leaders.
In recent months, Treasury Secretary Janet Yellen has warned of the "huge threat" of breaching the nation's debt limit.
McCarthy suggested Republicans aren't interested in fueling fiscal worries for the country. However, he was hard-pressed in winning the speaker's gavel to reach a series of deals with hardline members of his conference to lower spending.
McCarthy, however, has rejected worries of dangerous financial waters ahead.
"We don't want to put any fiscal problems to our economy and we won't," McCarthy said. "But fiscal problems would be continuing to do business as usual."
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