U.S. Speaker of the House Kevin McCarthy speaks to members of the media at the U.S. Capitol on May 24, 2023 in Washington, DC. McCarthy spoke on the ongoing debt limit negotiations. House Republicans are pushing debt ceiling talks to the brink, displaying risky political bravado as they prepare to leave town Thursday for the holiday weekend just days before the U.S. could face an unprecedented default that could hurl the global economy into chaos.
"This is a battle between extremism and common sense," said Democratic Rep. Katherine Clark of Massachusetts, the minority whip. In one potential development, Republicans may be easing their demand to boost defense spending, instead offering to keep it at levels the Biden administration proposed, according to one person familiar with the talks and granted anonymity to discuss them.
Time is short to strike a deal. Yellen said Wednesday that "it seems almost certain" that without a deal the United States would not make it past early June without defaulting. "We are seeing some stress already in Treasury markets," she said at a Wall Street Journal event. But what, if anything, Democrats would get if they agreed to deeper spending cuts than Biden's team has proposed is uncertain.