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Debt limit negotiations hit 'speed bump,' Democratic official says

McCarthy told reporters Wednesday that he hasn't spoken to Biden since Monday.

WASHINGTON — Negotiations over how to address the debt limit to avoid a catastrophic default have hit a "speed bump," a Democratic official familiar with the talks told NBC News on Wednesday.

After days of citing "productive" negotiations, the tone in Washington appeared to shift Tuesday after the negotiators disbanded at 1 p.m. ET with no plans for further talks or meetings between the leaders.

The Democratic official argued that President Joe Biden has "negotiated in good faith" on the nation's budget but said that House Speaker Kevin McCarthy, R-Calif., has "bowed to MAGA extremists who want no compromise." The source said far-right House Republicans are pressuring McCarthy not to budge.

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Biden is "willing to meet the speaker halfway," according to the official, who said that Biden has offered three items to Republicans: a spending freeze that cuts spending by more than $1 trillion over a decade, rescinding unspent Covid relief funds and a two-year cap on spending.

For his part, McCarthy arrived at the Capitol on Wednesday saying, "We'll get together this morning" when asked whether there would be negotiations during the day. The speaker said he hasn't spoken, however, to Biden since Monday and is talking to the White House's negotiating team.

McCarthy reiterated that Republicans want to spend less than the country spent in 2023. Asked how much less, he said, "That’s part of the negotiating. Democrats don’t even want to spend less, they want to spend more."

He has rejected a spending freeze at 2023 levels even though it would amount to a real dollar cut when adjusted for inflation.

The status of the talks from the White House’s perspective reflected McCarthy’s comments Tuesday when he said that they weren’t close to a deal on the debt ceiling.

“We’re not there yet,” he told reporters after huddling behind closed doors with rank-and-file House Republicans, adding that the two sides could still strike an agreement by June 1.

McCarthy had said that his meeting with Biden at the White House on Monday was "productive" but suggested that the major hurdle remained a disagreement over federal spending levels. Democrats have said they'd support freezing spending at current levels. House Republicans, however, want to cut spending to the level that was approved in 2021.

The GOP leader is under pressure from rank-and-file House Republicans not to give in to the White House.

On Wednesday, Rep. Chip Roy, R-Texas, circulated a memo to his GOP colleagues with talking points on the debt ceiling. It urges Republicans to give McCarthy "the strongest hand" by making clear that the conference is "unified to hold the line" and "messaging the specific purposes behind the Limit, Save, Grow Act," the GOP-sponsored legislation to address the debt limit that passed the House.

Roy sought to address criticism from Democrats by laying out possible responses. For example, on the criticism that work requirements "are draconian and uncompassionate reforms," Roy suggested responding with, "Our reforms are based on the 1996 welfare reforms that then-Senator Biden supported under President Clinton."

On Tuesday, Rep. Matt Gaetz, R-Fla., told Semafor that the ability of one Republican to motion to remove the House speaker "has given us the best version of Speaker McCarthy." He added, "I think my conservative colleagues for the most part support Limit, Save, Grow, and they don’t feel like we should negotiate with our hostage."