McCarthy Says He Sees a ‘Path’ to Debt Limit Deal

House Speaker Kevin McCarthy (R-Calif.) said Thursday morning that a deal on the debt ceiling could be reached in time for a vote on House floor as soon as next week, extending a sense of optimism that Congress and the White House are nearing an agreement to avoid a potentially catastrophic default.

“I see the path that we can come to an agreement," McCarthy told reporters at the Capitol. "And I think we have a structure now and everybody's working hard."

McCarthy also told CNBC earlier Thursday that he does not believe the country will default on its debt. Those comments helped send U.S. stocks higher in morning trading, continuing a rally based partly on traders' optimism that a deal is within reach.

Senate Majority Leader Chuck Schumer (D-N.Y.) said Thursday afternoon that negotiations were “making progress.” He said that the chamber would begin consideration of any deal after a House vote. The Senate is scheduled to be in recess next week, but Schumer advised members to be able to return within a 24-hour period if needed to vote on a debt ceiling agreement.

President Joe Biden, currently in Japan for a G7 summit, is expected to fly back to Washington on Sunday to help push a deal through.

Before departing on Wednesday, Biden reiterated that he was "confident" the White House and McCarthy would reach an agreement and avoid default, which Treasury Secretary Janet Yellen has warned could happen as soon as June 1 if the debt limit isn't raised.

Biden said he would not accept "any work requirements that's going to impact on medical health or needs of people" as part of the negotiations. But he also opened the door to other work requirements that would not be of "any consequence."

Republicans have pushed to expand work requirements for the Supplemental Nutrition Assistance Program, the Temporary Assistance for Needy Families program and Medicaid as part of the discussions, which has received strong push back from congressional Democrats.

After a Tuesday meeting between the president, Vice President Kamala Harris and the top four congressional leaders, talks have narrowed to key members of Biden's and McCarthy's teams.

Base pressures

But as congressional leaders expressed optimism Thursday about the prospects for a deal, they faced new pressures from their respective bases.

On the Republican side, the House Freedom Caucus said in a statement that "there should be no further discussion" between the two sides until the Senate passes the legislation the House approved last month that tied a debt limit increase to federal spending cuts. But that bill would have no path through the Democratic-controlled Senate.

And on the Democratic side, the group of senators urging Biden to bypass Congress and unilaterally raise the debt ceiling through the 14th Amendment grew to 11.