Bipartisan lawmakers draft ‘Plan B’ debt ceiling proposal as negotiations stall

Cami Mondeaux

April 19, 08:33 AM April 19, 08:33 AM

A bipartisan group of lawmakers drafted a debt ceiling proposal that would help the country avoid defaulting on its loans and would act as a backup plan if House Republicans and President Joe Biden can’t come to an agreement.

The plan created by centrist lawmakers in the Problem Solvers Caucus seeks to suspend the debt ceiling through the rest of the year while Congress proceeds with its usual budget and appropriations process, according to a confidential draft discussion obtained by Politico. The two-page memo does not go into detail on how the caucus would implement the plan, but it alludes to a framework that would take “a reasonable, responsible bipartisan approach.”

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As part of that plan, lawmakers would propose appointing an independent fiscal commission to “address ballooning debt and deficit and put the country on a sustainable path.” The group would be tasked with submitting its policy recommendations to Congress after the 2024 presidential election, which would then be teed up for a vote no later than February 2025.

“As every well-regarded expert, business leader, and economist can attest, defaulting would potentially send our currency and markets into a free fall,” the draft states. “Our nation is also on path to substantially increase our debt to GDP ratio from current alarming levels, which is unsustainable and fiscally dangerous.”

The backup plan comes as Republicans led by House Speaker Kevin McCarthy (R-CA) work to finalize a budget proposal by next week, hoping to restart negotiations with the White House on how to address the debt ceiling. Discussions have largely been stalled over the last two months as members of both parties attempt to use the financial crisis to achieve their priorities.

While Republicans seek to negotiate spending cuts in exchange for raising the debt ceiling, Democrats have remained adamant about passing a clean debt ceiling raise — putting lawmakers at an impasse just months before the looming deadline of a default.

McCarthy unveiled a proposal to GOP lawmakers on Tuesday that would raise the debt ceiling into 2024 while making cuts to government spending. The House speaker acknowledged the plan is not complete but will act as a catalyst to kick-start discussions with Biden.

The proposal, which McCarthy hopes to bring to the floor for a vote by next week, has received mixed reactions from GOP members. However, the speaker expressed confidence it can pass, urging members to back his plan.

McCarthy met with Biden in January to begin negotiations on the debt ceiling, but that meeting ended without a binding agreement as the White House maintains it will not discuss federal spending until the borrowing limit is lifted. McCarthy said on Monday he has not spoken with Biden since that initial meeting, accusing the president of “bumbling into the first default in our nation’s history.”

However, the White House declined to continue negotiations until Republicans release their budget proposal for the next fiscal year — a talking point that has been repeatedly used by Democrats in recent weeks.

“We will evaluate any legislative text when and if House Republicans can ever agree with themselves about how much they want to devastate American families,” House Minority Leader Hakeem Jeffries (D-NY) said.

It’s not clear whether the Problem Solvers Caucus plan would gain much traction in the House or come through for a vote. However, it is possible it will spark conversations about alternative plans to address the debt ceiling if an agreement can’t be reached.

Manchin criticizes Biden for placing 'ideological agenda' over debt ceiling negotiations

Cami Mondeaux

March 30, 09:13 AM March 30, 09:16 AM

Sen. Joe Manchin (D-WV) hit out against President Joe Biden on Wednesday, accusing the president of pushing his “ideological agenda” rather than meeting with members of Congress to address inflation and the looming debt ceiling crisis.

In an op-ed published by the Wall Street Journal, Manchin criticized Biden over his administration’s implementation of the Inflation Reduction Act, a landmark bill the West Virginia Democrat helped construe to reduce the country’s deficit and promote energy security. However, Manchin accused Biden administration officials of abusing the Inflation Reduction Act to increase spending levels unilaterally, calling the act a “betrayal.”

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“While all parties have a responsibility to negotiate in good faith, recent actions make clear to me that the Biden administration is determined to pursue an ideological agenda rather than confront the clear and present danger that debts and deficits pose to our nation,” Manchin wrote. “Instead of implementing the law as intended, unelected ideologues, bureaucrats and appointees seem determined to violate and subvert the law to advance a partisan agenda that ignores both energy and fiscal security.”

Manchin specifically accused the Biden administration of ignoring stipulations in the Inflation Reduction Act to expand fossil fuel energy by redefining “domestic energy” to align with its own clean energy initiatives.

“The administration is attempting at every turn to implement the bill it wanted, not the bill Congress actually passed,” he wrote. “Ignoring the debt and deficit implications of these actions as the time nears to raise the debt ceiling isn’t only wrong, it’s policy and political malpractice.”

The West Virginia senator urged Biden to reverse those actions, offering a two-step plan to rein in the so-called “extremism.”

First, Manchin called on Biden to meet with “fiscally minded” Republicans and Democrats to negotiate a solution to the debt ceiling crisis, urging the president to end his stalemate with House Speaker Kevin McCarthy (R-CA) to come to an agreement. Biden and McCarthy initially met in January to discuss the debt ceiling, but the pair have not met since — with Biden maintaining he would not negotiate further until Republicans release their budget for the next fiscal year.

Manchin criticized Biden for his refusal to meet, urging the president to find areas in his own budget proposal to negotiate.

“While we can all acknowledge that raising the debt limit is an absolute necessity and Republicans shouldn’t threaten otherwise, are we seriously to believe there is no room to negotiate?” Manchin wrote. “Does the federal government operate so efficiently and effectively that there truly isn’t a dollar of waste, fraud or abuse? Let’s get serious.”

Manchin also pressed Biden to instruct his administration officials to implement the Inflation Reduction Act “as written” rather than interpreting its provisions to advance their own agenda.

“The president has the power, today, to direct his administration to follow the law, as well as to sit down with congressional leaders and negotiate meaningful, serious reforms to the federal budget,” Manchin wrote. “Failing to do so may score political points with left-wing partisans, but generations of Americans will ultimately pay the price.”

Biden responded to Manchin’s criticisms on Thursday morning, noting the president and senator share a “strong and productive relationship.” However, Biden did not indicate whether he would call for a meeting with congressional leaders.

"We are proud of the Inflation Reduction Act and our shared goals it achieves — promoting America’s energy security, strengthening supply chains, creating good-paying manufacturing jobs, and investing in energy communities and towns across America that have been left behind,” the White House said in a statement.