Biden hosts a big debt ceiling meeting while insisting there's nothing to talk about

W. James Antle III

May 09, 07:00 AM May 09, 07:01 AM

President Joe Biden is set to meet Tuesday with House Speaker Kevin McCarthy (R-CA) and other congressional leaders about the debt ceiling standoff, but if you believe the White House, there is nothing to talk about.

“Look, there shouldn't be negotiations on the debt limit,” White House press secretary Karine Jean-Pierre told reporters Monday. “This is something that they should get to regular order and get to work on. We should not have House Republicans manufacturing a crisis on something that has been done 78 times since 1960.”

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Jean-Pierre pitched the meeting as more of a Biden lecture. “So we're telling them — or saying to them: Do your job,” she said. “Pay for something that you've already spent on. That's it.” The message was similar last week.

“It is the president's job to also be very clear with Congress, with Republicans in Congress: You got to do your job,” Jean-Pierre said. “It is simple.”

“The question is to Speaker McCarthy, as I've said many times before here, is to — to the MAGA Republicans: What is going on here?” she added. “Why can you not get this done? It is simple. It is simple.”

“Let me be very clear: Congress needs to do its job,” budget director Shalanda Young concurred. “Tomorrow, they could put a bill on the floor to make sure we don't default. This is of people's own making.”

“As you know, the president is going to make clear that default has to come off the table, that he is happy to talk about spending priorities and who you value in this country, what our right tax policy is in this country, why every time we have this debate it has to go to working families in this country first in order to do the right thing for this country,” Young also told reporters.

In this telling, McCarthy and other congressional leaders are going to the White House for some coaching, and Biden is Bill Belichick: Do your job. There is no dialogue, only a monologue.

Young mocked this idea even while suggesting it would be Biden’s approach.

“Imagine if this president said, ‘Here's my budget' on March 9. 'If you don't take it all — lock, stock, and barrel, don't change your word, pass it without changes, I'd be willing to cause a recession and cost millions of people their jobs.’ That would be extreme,” she said.

At the same time, Young was saying Biden and his team did not view the only debt ceiling extension to pass a house of Congress, however narrowly, to be the starting point for the talks even though there is a risk of default sometime in June.

On the one hand, Young said Biden is “eager to have a separate conversation about the budget without threatening our economy.” On the other hand, “this is not some abstract debate.” The Biden budget, it seems, is better.

At Monday’s briefing, there were nearly a dozen instances of Jean-Pierre telling Congress to do its job, though some of those comments were referring to passing gun control rather than raising the debt ceiling without spending cuts.

This could all be posturing. In his 36 years in the Senate, Biden threw sharp partisan elbows in public and negotiated in private. He led the debt ceiling talks with House Republicans as vice president under former President Barack Obama, which did result in some spending cuts.

It is possible that Biden’s off-ramp will be an agreement on spending cuts passed through legislation separate from a debt ceiling extension or suspension. The White House invitation itself was a softening of the no-negotiations stance in response to a letter from Treasury Secretary Janet Yellen moving up the day of debt limit reckoning.

“I think that we have to make it clear to the American people that I am prepared to negotiate in detail with their budget,” Biden said in an interview with MSNBC on Friday night. “How much are you going to spend? How much are you going to tax? Where can we cut?”

At the same time, Biden and congressional Republicans are far apart on spending priorities. There is little trust between them that would allow for a quick debt ceiling extension to be followed by budget negotiations.

The White House meeting could also be about establishing blame, as Biden’s team has spent a considerable amount of time arguing that any default, with economic consequences that could prove as dangerous to the president as the GOP, is the fault of House Republicans.

Biden was elected as a legislative deal-maker extraordinaire. But don’t call Tuesday’s bipartisan meeting a negotiation just yet.

White House refines its messaging war on debt ceiling ahead of McCarthy meeting

Naomi Lim

May 05, 06:46 PM May 05, 06:46 PM

The White House is tinkering with its criticism of Republicans before President Joe Biden sits down with Democratic congressional leaders, House Speaker Kevin McCarthy, and Senate Minority Leader Mitch McConnell to discuss the debt ceiling.

From warning of a "fire-alarm fire" and the country's risk of being perceived as a "deadbeat nation" to the debt ceiling fight being a "manufactured crisis," complementing claims Republicans will cut Meals on Wheels to law enforcement funding, the White House is still workshopping its response to the GOP as new polling reveals a public opinion split on who will be held responsible if there is a default.

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The White House does not have a message regarding the debt ceiling because they do not have a strategy for negotiating with Republicans, according to Dan Schnur, the communications director of the late Sen. John McCain's (R-AZ) 2000 presidential campaign and founder of the University of Southern California-Los Angeles Times state poll.

"They have misunderstood and under-estimated McCarthy every step of the way, and they still can’t decide if he’s an ally or an enemy," Schnur told the Washington Examiner.

The House has passed the Limit, Save, Grow Act, which would raise the debt ceiling by $1.5 trillion if non-defense discretionary federal spending is decreased to fiscal 2022 levels, budget increases are capped at 1% per year, and entitlement program work requirements are introduced, in addition to COVID-19 funding, Inflation Reduction Act green energy tax credit and IRS provisions, and Biden's student loan forgiveness proposal being repealed, per former Rep. Tim Huelskamp (R-KS).

"Now Joe Biden and the Senate Democrats are on the clock,” Huelskamp, a former House Tea Party Caucus chairman, and veteran of multiple debt ceiling squabbles, said. “Rather than attacking Republicans, it’s time for Biden and the rest of the Democrats to do their job and provide a solution that ends their out-of-control spending spree."

It is difficult for the public to know who to blame in the debt ceiling impasse after Biden scheduled talks with McCarthy and McConnell next Tuesday following months of declining to, Brookings Institution governance studies senior fellow Darrell West added.

Almost 40% of respondents to a Washington Post-ABC poll published Friday, for example, would blame congressional Republicans if there is a default and 36% Biden. Another 16% contend both the president and the GOP would be responsible if the country cannot pay its bills when the Treasury Department can no longer use cash on hand and so-called extraordinary measures this summer. Interestingly, almost 60% agree with Biden that the debt ceiling and spending cuts should be dealt with separately. Roughly a quarter side with Republicans in that the borrowing cap should only be raised in return for spending decreases.

"In a polarized world, people assume anyone on the other side is to blame so if Congress is unable to lift the ceiling, most people [will] side with their own group so there may not be a clear political winner," West said. "It will be easy to blame the other side for the intransigence that led to a government shutdown. The president [holds] big cards in a shutdown because he gets to decide what gets shutdown first."

"One popular tactic during summertime is to close the national parks knowing that the public will be outraged and will demand an end to the stalemate," TechTank's editor-in-chief went on. "Other popular bargaining chips could be Social Security payments, veterans benefits, and food programs because each has a ready-made constituency for its cause. The only safe prediction is political blame will be unpredictable and lots of people will end up being angry if Congress cannot resolve this issue."

Biden appeared to address the debt ceiling polling divide, repeating that he hoped to speak directly with the public during remarks to reporters before a Roosevelt Room meeting.

"This is becoming an issue in other countries. 'What is the United States going to do? Are they really fooling around with not paying the debt?'" he said. "So next week I'm going to reiterate to congressional leaders that they should do what every other Congress has done: that is pass the debt limit, avoid default. As I have said all along, we can debate where to cut, how much to spend, how to finally move the tax system where everybody has to pay their fair share or continue the route they're on, but not under the threat of default."

While Biden and Republicans may have publicly reiterated their positions, the White House is reportedly privately considering a short-term stopgap to the debt ceiling, a stance Office of Management and Budget director Shalanda Young confirmed during a briefing this week.

"Congressional leaders are going to have to figure out a way to do this," she said. "You saw the length in the congressional Republicans’ bill that would take us into this situation again, this time next year. So I'm sure one of the things on the table we will have to work through is how long. I'm not going to take anything off the table."

Biden and McCarthy enter the next phase of their debt ceiling showdown

Naomi Lim

April 19, 05:27 AM April 19, 05:27 AM

More than 100 days into the 118th Congress and with only months before the country could default, President Joe Biden and House Speaker Kevin McCarthy (R-CA) are at loggerheads over the debt ceiling and federal budget.

But McCarthy's efforts to broker a debt ceiling deal among House Republicans could backfire with only a four-vote majority, jeopardizing negotiations with the White House, the stock market, millions of jobs, and the global financial system.

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House Republican Study Committee Chairman Kevin Hern (R-OK) is "encouraged" by McCarthy's outreach after the speaker spoke on the phone last weekend with his conference about the debt ceiling and then convened an in-person meeting Tuesday. The face-to-face was scheduled after McCarthy addressed Wall Street earlier this week.

"There seems to be a consensus among the conference on a number of issues, including bills we have already passed, that should be included in our debt limit legislation," Hern told the Washington Examiner. "There’s still hard work ahead of us, but I believe we can get 218 votes by the end of next week.”

Those bills include House Republicans' repeal of $80 billion in IRS funding, allocated through the Democrats-only Inflation Reduction Act, in addition to that measure's climate provisions — as well as the GOP-only Lower Energy Costs Act.

"A large bloc of members really want to see IRS & IRA included in the final bill," one source familiar said. "At conference this morning, there was wide support behind the inclusion of both IRA/IRS, and McCarthy seemed to be willing to have that discussion."

Rep. Chip Roy (R-TX) is one of those lawmakers, contending, "under no circumstances," should House Republicans "pass a long-term debt ceiling increase to mortgage our kids' future without getting substantive changes."

"We need to undo the Inflation Reduction Act, so-called, which has all these ridiculous green subsidies, which would destroy our ability to have economic growth and energy freedom," he told conservative radio host Glenn Beck. "We need to undo the damage of the IRS proposal, which will hang these bureaucrats going after the American people, who are trying to just go through their life."

McCarthy is seeking a vote on a debt ceiling deal before the House's next recess from April 28. The initial agreement, tentatively whipped by Reps. Tom Emmer (R-MN) and Guy Reschenthaler (R-PA), includes raising the debt ceiling for a year in exchange for capping nondefense discretionary spending at $584 billion next year, restricting budget increases to 1% annually for the next decade, redirecting unused COVID-19 aid, introducing social program work requirements, rescinding green tax credits, and rolling back student loan forgiveness schemes, among other ideas. But Biden has pressed McCarthy on where those cuts will come from.

During his New York Stock Exchange remarks, McCarthy was adamant "a no-strings-attached debt-limit increase will not pass," demanding Biden sit down with him to talk about the debt ceiling and budget.

"If there’s one thing I hope America has learned about me in these first 100 days since I was elected speaker, it’s this: I will never give up," he said Monday. "We owe it to the American people to use this moment in history to deliver the future they want, need, and deserve."

"Do you have the support of your party for what you’re actually proposing?” CNBC asked him afterward.

McCarthy replied, “You know what, I think I have the support of America because I’ll get the party behind it.”

Investors seemingly remain confident the White House and McCarthy will reach a deal and avoid a default. But House Republicans' response to Tuesday's meeting demonstrates the precariousness of the moment, with the conference not close to a debt ceiling raising agreement, let alone a budget, which is Biden's precondition for a conversation about spending. Simultaneously, McCarthy is grappling with reports he does not trust House Majority Leader Steve Scalise (R-LA) and Budget Committee Chairman Jodey Arrington (R-TX).

The White House has criticized McCarthy's speech and his approach to the debt ceiling and budget more broadly, though at least one poll indicates the speaker may be better positioned than Biden in their competing public relations campaigns. More than 50% of respondents in McCarthy-aligned American Action Network's battleground poll this month believe the speaker is negotiating with Biden in good faith, compared to 36% who think he is not. Roughly the same percentage are against raising the debt ceiling without cutting spending, in contrast to 37% who are for it.

"Yesterday, the speaker of the House, Kevin McCarthy, went to Wall Street," Biden said Tuesday during what was billed as a "care economy" event at the White House. "He did not tell the wealthy or the powerful on Wall Street it was finally time for them to start paying their fair share in taxes. That didn't come up, other than saying they're going to renew the $2 trillion tax cut."

White House spokesman Andrew Bates specifically ripped McCarthy for permitting "ultra-MAGA hardliners" to dominate the House Republican conference, repeating how the GOP raised the debt ceiling three times for former President Donald Trump.

"Now, the increasingly empowered extreme MAGA Republicans want their ransom to be killing tens of thousands of manufacturing jobs in a windfall for China, raising prescription drug and energy costs for middle-class families, and sending the deficit skyward — all in the name of sweetheart deals for rich special interests," he said.

Schumer: ‘If Speaker McCarthy doesn’t change course, we’re are headed for default'

Samantha-Jo Roth

April 17, 03:28 PM April 17, 03:28 PM

Senate Majority Leader Chuck Schumer (D-NY) warned the United States is “headed for default” in response to House Speaker Kevin McCarthy's (R-CA) debt limit speech at the New York Stock Exchange, calling the speech “theater” during a press conference on Monday.

“What we got today is not a plan. It’s a recycled pile of the same things he has been saying for months,” Schumer said to reporters during a press conference.

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McCarthy outlined a proposal to lift the nation’s credit limit for one year in exchange for significant spending cuts and policy changes to federal assistance programs on Monday. He said House Republicans could vote “in the coming weeks.” Republicans have yet to offer a budget plan that would set out specifics of where the spending cuts would fall, which President Joe Biden and Schumer have repeatedly called on them to do. Schumer rejected one of the specific details McCarthy mentioned on Monday.

“Amazingly, one of the few specifics McCarthy presented is this terrible idea to kick the can down the road for just one year and undergo the same crisis again,” Schumer said. “Why would anyone want to undergo this crisis again and again and again and again?”

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Schumer called on the House speaker to “show us your plan,” a rallying cry he’s been using since early January. McCarthy’s speech comes as Republicans have yet to agree on a fiscal blueprint for the budget. It’s unclear whether the proposal outlined by McCarthy on Monday could pass in the lower chamber with a slim majority. His proposal appeared to be significantly narrower than demands from some in the party that included balancing the budget in 10 years.

Negotiations have been at a stalemate as both sides attempt to leverage the debt ceiling crisis to advance their own positions. Democrats remain firm in their stance that House Republicans should raise the nation’s borrowing limit with no conditions. House Republicans continue to reject that position and assert they won’t pass a debt ceiling increase unless they have an agreement with the White House on budget cuts.

The speaker sent a letter to Biden on March 28 urging him to restart negotiations, accusing him of putting the economy “in jeopardy” by refusing to negotiate. Biden and Democrats have repeatedly said a second meeting could not occur until Republicans release their proposed budget for the next fiscal year. Biden responded that day, telling McCarthy that House Republicans must first release their proposed budget ahead of a meeting.

The Treasury Department warned on Jan. 19 it was using extraordinary measures to prevent a government default. It's unclear on what date the U.S. will default, but it will likely happen in the summer if lawmakers don't come to an agreement. The Senate majority leader said he had not received any new updates from Treasury Secretary Janet Yellen on when a default could occur.

White House invokes Trump and Reagan to attack McCarthy's debt 'brinkmanship'

Christian Datoc

April 17, 09:27 AM April 17, 09:27 AM

The Biden White House launched a new line of debt limit attacks against House Republicans ahead of House Speaker Kevin McCarthy's (R-CA) Monday speech in New York.

McCarthy is slated to lay out the GOP's budget proposals amid an escalating standoff with President Joe Biden over the debt limit.

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McCarthy and Republicans are refusing to address the debt ceiling without extracting spending concessions from Democrats but have failed to propose specific cuts, which White House officials say is already threatening the "reliability and credibility" of U.S. credit months ahead of this summer's deadline.

"There is one responsible solution to the debt limit: addressing it promptly, without brinksmanship or hostage taking — as Republicans did three times in the last administration and as Presidents Trump and Reagan argued for in office," White House deputy press secretary Andrew Bates said in a statement Monday morning. "Speaker McCarthy is holding the full faith and credit of the United States hostage, threatening our economy and hardworking Americans’ retirement."

Bates claimed McCarthy's speech "isn’t a plan, but it’s clear that extreme MAGA Republicans’ wish lists will impose devastating cuts on hardworking families, send manufacturing overseas, take healthcare and food assistance away from millions of people, and increase energy costs — all while adding trillions to the debt with tax cuts skewed to the super-wealthy and corporations."

The White House has pointed to how Democrats worked with Republicans to raise the debt limit in the previous administration but additionally quoted former Presidents Donald Trump and Ronald Reagan cautioning against debt ceiling "brinkmanship."

Bates pointed to remarks Trump gave in 2019 about working with then-Senate Minority Leader Chuck Schumer (D-NY) and former House Speaker Nancy Pelosi (D-CA) to avoid a debt showdown.

"I can’t imagine anybody ever even thinking of using the debt ceiling as a negotiating wedge," Trump remarked at the time. "[I said to] Sen. Schumer and to Nancy Pelosi, ‘Would anybody ever use that to negotiate with?’ They said, ‘Absolutely not.’ That’s a sacred element of our country.”

Reagan, in a 1987 radio address, similarly claimed that debt "brinkmanship threatens the holders of government bonds and those who rely on Social Security and veterans benefits."

"The United States has a special responsibility to itself and the world to meet its obligations. It means we have a well-earned reputation for reliability and credibility — two things that set us apart from much of the world.”

Lawmakers return to Washington with no debt ceiling deal in sight

David Sivak

April 17, 05:25 AM April 17, 05:25 AM

It’s been three months since Kevin McCarthy (R-CA), freshly elected as speaker of the House, called on Joe Biden to negotiate spending cuts in exchange for hiking the debt limit.

Yet as Congress returns from a two-week recess on Monday, House Republicans are no closer to resolving what has become a protracted fight with the president.

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Lawmakers fly back to Washington on Monday to consider a series of measures being voted on this week, including an effort to roll back police reforms enacted by the D.C. Council and legislation banning transgender athletes from competing in girls sports.

But looming in the background is a more daunting task for House Republicans: coalescing behind an opening offer in debt ceiling negotiations with the White House.

McCarthy's pledge to push for deep spending cuts, made to hard-liners in his conference to win the speaker's gavel, put him on a collision course with Biden, who is adamantly refusing to make concessions. McCarthy is slated to give a major speech on the debt limit at the New York Stock Exchange on Monday morning, a move reminiscent of President Ronald Reagan's own speech there 37 years ago.

The impasse threatens to send the United States into default as it approaches an unknown “X date” to lift the debt limit. The Treasury Department, which is using “extraordinary measures” to pay its federal obligations since hitting the government’s $31.4 trillion cap in January, has estimated it could run out of money as soon as June, though a late summer deadline is more likely.

That means Washington will have to agree to a deal before lawmakers depart for the monthlong recess in August.

Biden and McCarthy met at the White House for an initial meeting in February, even as the president reiterated his demand for a clean debt ceiling hike, and the pair put on a show of bipartisanship at a St. Patrick's Day luncheon six weeks later.

But no progress has been made between the two leaders with just months left to act.

McCarthy pressed for a second meeting shortly before the Easter recess, penning a letter in which he blamed Biden for not scheduling another sit-down. The move prompted the president to return the finger-pointing with a common refrain among Democrats: “Show us your budget.”

Biden argues negotiations won't be productive without McCarthy putting forward a budget that details the cuts Republicans want to make and refuses to sit down with him until then. The president says the ball is in Republicans' court after the White House released its own 2024 budget blueprint in March.

McCarthy outlined some of the possible demands in his March 28 letter, but the president quickly demanded a “full set of proposals.”

The posturing from the White House suggests the president views himself as having the upper hand in the stalemate. Republicans are historically blamed for government shutdown fights, and there’s no reason to expect the debt ceiling standoff is any different.

But more importantly, it’s not clear McCarthy has the votes needed to pass the spending cuts he’s demanding with only a four-seat majority in the lower chamber. He has to bridge the demands of hard-line members of the Freedom Caucus with the reservations of centrist Republicans up for reelection in swing districts.

Democrats are already messaging that Republicans want to slash popular programs and hurt the poor, and centrists may balk at taking a politically tough vote.

The sheer difficulty of getting the fractious Republican conference to agree on a set of demands is the greatest test yet for McCarthy’s speakership, one that has led to simmering tensions within House GOP leadership.

McCarthy has reportedly disparaged his top deputies in private, prompting blowback from lawmakers who say the speaker is trying to find a scapegoat in case their fight backfires.

But there are signs Republicans could rally around a set of demands. The Main Street Caucus, which represents a group of 70 “pragmatic” Republicans, outlined on Thursday a list of concessions it believes could get 218 votes.

The list includes clawing back some $70 billion in COVID-19 relief funds that states have not spent, reversing Biden’s student loan forgiveness program, and capping discretionary nondefense spending at 2022 levels.

The outline, sent to McCarthy in a letter on Thursday, also showed an appetite for energy permitting reform as part of a deal and called for work requirements for food stamps beneficiaries.

The demands are similar, if less expansive, than those put forward by the ultraconservative House Freedom Caucus in March. Any deal would need buy-in from its 30-some members, who were able to force the concessions during McCarthy’s speakership election in the first place.

But they show some areas of consensus as House leadership tries to unite the “five families” of the GOP conference.

House Republicans are drafting legislation that includes a set of demands with the widest support, according to Politico, and hope to pass the measure by the end of May.

The legislation would amount to the GOP’s first formal offer in talks with the White House and, if passed, would signal the GOP is serious about forcing cuts.

Thus far, Senate Republicans, who lack a majority in the upper chamber, are letting the House GOP take the lead on negotiations.