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No agreement on budget caps in sight ahead of Memorial Day recess

No agreement on budget caps in sight ahead of Memorial Day recess
© Greg Nash

The odds of congressional negotiators reaching a deal to lift budget caps and raise the debt ceiling ahead of their Memorial Day recess appear to be growing increasingly grim despite top lawmakers's earlier optimism. 

"The first meeting went pretty well the second meeting not as well,” House Minority Leader Kevin McCarthyKevin Owen McCarthyRichmond says GOP 'reluctant to stand up and tell the emperor he wears no clothes' Sunday shows preview: Biden transition, COVID-19 spike in spotlight Drastic cuts proposed to Medicare would hurt health care quality MORE (R-Calif.) said Wednesday. “I think it will take a little more time."

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Disagreements over nondefense discretionary spending remain a key sticking point between parties, with Republicans arguing Democrats are requesting “obscene” levels of spending. And while offers continue to be exchanged, no additional meetings between the “big four” — Speaker Nancy PelosiNancy PelosiSpending deal clears obstacle in shutdown fight Ocasio-Cortez, Cruz trade jabs over COVID-19 relief: People 'going hungry as you tweet from' vacation Rep. Rick Allen tests positive for COVID-19 MORE (D-Calif.) House Minority Leader Kevin McCarthy (R-Calif.), Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellImmigration, executive action top Biden preview of first 100 days Spending deal clears obstacle in shutdown fight McConnell pushed Trump to nominate Barrett on the night of Ginsburg's death: report MORE (R-Ky.) and Senate Minority Leader Chuck SchumerChuck SchumerUS national security policy in the 117th Congress and a new administration Voters say Biden should make coronavirus vaccine a priority: poll New York City subway service could be slashed 40 percent, officials warn MORE (D-N.Y.) — and administration officials have been scheduled, a source with knowledge of the discussions said.

The House is scheduled to fly out Thursday afternoon.

Negotiators seemed poised to strike a deal after a scheduled meeting ran long and resulted in a second meeting Tuesday. Senate Majority Leader Mitch McConnell (R-Ky.) said he expected an agreement by the end of the day.

Instead, the second meeting let out quickly with no deal.

"There are still some significant issues outstanding, particularly the domestic-side spending issues -- things like health care, infrastructure and things that average middle-class folks need,”  Sen. Minority Leader Charles SchumerChuck SchumerUS national security policy in the 117th Congress and a new administration Voters say Biden should make coronavirus vaccine a priority: poll New York City subway service could be slashed 40 percent, officials warn MORE (D-N.Y.) said. 

Despite the impasse over nondefense spending, the group has been able to reach a general consensus around setting defense spending levels at $733 billion (including off-book spending) and a debt ceiling lift. 

Pressure for Congress to take action on raising the debt ceiling was amplified Wednesday after Treasury Secretary Steven MnuchinSteven Terner MnuchinThe Hill's Morning Report - Presented by the UAE Embassy in Washington, DC - Trump OKs transition; Biden taps Treasury, State experience On The Money: Democrats accuse Mnuchin of sabotaging economy in dispute with Fed | Trump administration proposal takes aim at bank pledges to avoid fossil fuel financing | JPMorgan: Economy will shrink in first quarter due to COVID-19 spike Democrats accuse Mnuchin of sabotaging economy in dispute with Fed MORE warned the U.S. government could face a default by late-summer, sooner than most analysts projected.

Democrats want spending for two programs – the 2020 census and the VA mission act – to be moved to off-budget accounts, leaving more room for other domestic priorities.

House Democrats on Wednesday approved a bill that included some $8.5 billion in spending for the 2020 census. The VA Mission Act, which had previously been funded through automatic mandatory spending, is due to move nearly $9 billion onto the discretionary side of the ledger this year.

A House aide said it was "more likely that we’ll discover the moon is made of green cheese” than strike a deal this week.