McCarthy says he spoke with Trump about US debt ceiling talks

WASHINGTON (Reuters) – Republican U.S. House of Representatives Speaker Kevin McCarthy said on Thursday he spoke briefly with former President Donald Trump about the debt ceiling negotiations in recent days, as time runs short for an agreement to avoid default.

Trump, who is seeking a second term in 2024 amid multiple legal challenges, has downplayed the impact of a default while urging Republican lawmakers to take a harder position in talks.

“Republicans should not make a deal on the debt ceiling unless they get everything they want,” Trump posted on Truth social last week. “Do not fold!!!”

Economists say that a default would be economically devastating, shaking financial markets worldwide, pushing borrowing costs high and provoking a deep U.S. recession with soaring unemployment.

McCarthy, speaking to reporters outside the Capitol, said: “I did talk to President Trump the other day and it came up, but just for a second.”

McCarthy said Trump told him to “make sure you get a good agreement as you move forward.”

Representatives for Trump could not be immediately reached for comment on his talks with McCarthy.

President Joe Biden and McCarthy were edging closer on Thursday to an agreement on raising the country’s $31.4 trillion debt ceiling, with the two sides just $70 billion apart on a deal, according to a person familiar with the talks.

The U.S. Treasury has warned it could run short of funds to cover all its expenses as early as June 1, triggering a economically catastrophic default unless Congress reaches a deal.

Some hardline House Republicans have pushed back against any compromise deal and insist any agreement must include sharp spending cuts.

(Reporting by David Morgan and Nathan Layne; additional reporting by Rami Ayyub; writing by Susan Heavey; Editing by Alistair Bell and Chizu Nomiyama)