No debt ceiling agreement as White House, Republicans eye specific cuts, including IRS funding: Reports

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Which party has the edge on debt limit negotiations?

'Special Report' panelists discuss the ongoing debt limit talks as House Speaker Kevin McCarthy and President Biden face off with the June 1 deadline quickly approaching. 

A source familiar with the ongoing talks between the White House and lawmakers from Capitol Hill told Fox News Digital the two sides had "not agreed" on any of the top line items or a one or two year extension of the debt limit as talks continued into Thursday night. 

According to the source, the two sides could not agree on any components until there was an agreement on defense and non-defense discretionary spending.

Other reports said the negotiating parties were nearing a deal on raising the debt limit and cutting spending as the talks continued.

The New York Times reported that the potential deal would provide a two-year increase in the debt limit and cap on all non-defense and veteran-related federal spending. Spending on the military and some veteran related care would increase next year, while non-defense spending would either fall or stay the same, the report said.

THE HITCHHIKER'S GUIDE TO GETTING A DEBT CEILING DEAL

U.S. Senate Minority Leader Mitch McConnell (R-KY), Speaker of the House Kevin McCarthy (R-CA), President Joe Biden, and Senate Majority Leader Chuck Schumer (D-NY) meet in the Oval Office of the White House on May 09, 2023 in Washington, DC. (Anna Moneymaker/Getty Images)

The same report said that the deal would also reduce by $10 billion the controversial $80 billion Congress approved for the IRS last year for thousands more IRS agents.

The Washington Post reported White House aides were considering trimming the billions in IRS funding as a concession to keep intact funding for other domestic programs. The report similarly said the Biden administration and members of Congress involved in the talks were seeing progress towards an agreement.

When reached for comment, the White House told Fox it had "nothing to share." Earlier in the day, President Biden said he and Republicans are in full agreement that the U.S. will not default on its debt, but clarified that many points remain to be negotiated before a budget deal can be made.

DEBT CEILING CRYSTAL BALL: DEAL UNLIKELY OVER NEXT COUPLE OF DAYS

President Joe Biden arrives for an event in the Rose Garden of the White House May 25, 2023 in Washington, DC. (Drew Angerer/Getty Images)

Lawmakers are scrambling to negotiate a budget deal that will allow the U.S. to raise the debt ceiling and avoid defaulting for the first time in the country's history. The deadline for a deal is expected to come as early as June 1.

The frantic dealmaking comes after months of Biden's White House insisting they would not negotiate with Republicans, arguing that Congress should simply raise the debt ceiling no questions asked.

Speaker of the House Kevin McCarthy, R-Calif., talks to reporters just after the Republican majority in the House narrowly passed a sweeping debt ceiling package as they try to push President Joe Biden into negotiations on federal spending, at the Capitol in Washington, Wednesday, April 26, 2023.  (AP Photo/J. Scott Applewhite)

Fox News reached out to House Speaker Kevin McCarthy's office but did not immediately receive a response.

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Fox News' Anders Hagstrom contributed to this report.