Biden Begins Debt Ceiling Negotiations with McCarthy
President Joe Biden will host House and Senate leaders from both parties on Tuesday afternoon to discuss urgent plans to raise the debt ceiling before a June 1 deadline. Biden has not met with House Speaker Kevin McCarthy (R-Calif.) since February 1, but McCarthy’s negotiating position grew much stronger after House Republicans in late April passed a bill tying a temporary debt ceiling increase to spending cuts.
Even though Biden will meet with McCarthy, as well as Senate Majority Leader Chuck Schumer (D-N.Y.), Senate Minority Leader Mitch McConnell (R-Ky.), and House Minority Leader Hakeem Jeffries (D-N.Y.), Biden has refused to negotiate a debt ceiling increase in return for spending cuts. “Those two are totally unrelated. Whether you pay the debt or not, doesn’t have a damn thing to do with what your budget is,” said Biden on Friday.
To congressional Republicans, this stance is not only unreasonable but also ignores the facts. “The last 11 spending reduction reforms enacted by Congress were bipartisan and attached to legislation that raised the debt ceiling,” said House Ways and Means Chairman Jason Smith (R-Mo.) in March. “As a senator, Biden voted for such reforms in 1985, 1987, 1993, and 1997, and helped negotiate spending constraints in 2009 and 2011, when he was vice president.”
White House Press Secretary Karine Jean-Pierre reiterated on Monday, “I wouldn’t call it a debt ceiling negotiation. I would call it a conversation between the four leaders and the president.” Whatever it’s called, this is a conversation the White House neglected for three months but has now agreed to hold.
While the top four congressional leaders will all be present, McConnell said the real negotiation required for any final deal is between Biden and McCarthy, whose party controls the House of Representatives, where all spending bills must originate. “This is the very same advice I gave Donald Trump after the Democrats took the House [in 2018],” said McConnell. “Quit wasting time here. And in the end, the deal will be made between McCarthy and Biden.”
Unable to crack Republican unity, the Biden administration is searching around for some leverage against McCarthy’s position. One method is direct personal pressure. Democrats will outnumber Republicans at Tuesday’s five-person talks, instead of just a one-on-one meeting between Biden and McCarthy.
Another strategy is recruiting CEOs to lobby House Republicans. Anonymous sources told Reuters on Monday that Treasury Secretary Janet Yellen is asking individual CEOs to consider the “dangerous consequences of the current brinksmanship” and lobby House Republicans to accept a clean debt ceiling increase. Brinksmanship, or pursuing a dangerous policy to the limits before stopping, more accurately describes President Biden’s refusal to negotiate for three months, leading to the present urgency.
A third strategy Biden aides are mulling is to declare the debt ceiling unconstitutional, granting the president unilateral power to raise the debt limit. This theory relies upon Section 4 of the 14th Amendment, which states, “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.” The theory has never been officially adopted by any federal branch; it was briefly considered during Obama-era debt ceiling struggles but ultimately rejected. However, a public union, the National Association of Government Employees, sued Monday to void the debt limit based on this theory.
National Review’s Rich Lowry called this 14th Amendment theory “absurd” and a “ridiculous contrivance” based on the fact that “pretty much everyone in authority dismissed the idea until now.” He notes that Congress implemented a debt limit in 1917, before which Congress had to vote to authorize every bond issue. “The debt limit is the logical extension of Congress’s power to tax and spend,” said Lowry. “The Biden administration could save itself the trouble of trying to twist the Constitution to suit its narrow political purposes if it simply sat down with Congress and negotiated in good faith.”
The budget proposal passed by House Republicans does not cut spending in the sense of absolute reductions. Instead, it limits future spending growth, pegging fiscal year 2024 spending at the same level as fiscal year 2022, with a 1% increase each year, which the Congressional Budget Office estimates will reduce future deficits by $4.5 trillion over the next 10 years. In return, the budget proposal extends the debt ceiling until May 2024. This is the budget deal Biden refuses to accept. By contrast, the White House’s 10-year budget proposal would run annual budget deficits from $1.5 trillion to $2 trillion over the next decade.
While Biden’s and McCarthy’s positions begin far apart, they must reach an agreement by June 1 to avoid a possible crisis, the date beyond which Treasury Secretary Yellen recently said the U.S. might begin to miss interest payments.
“The clock is ticking on this debt ceiling crisis and the American people will pay the economic price if President Biden continues to refuse to sit down and negotiate a commonsense compromise that would prevent a historic default,” said Senator Joe Manchin (D-W.Va.), a member of the president’s own party. “Speaker McCarthy did his job, and he passed a bill that would prevent default and finally begin to rein in federal spending. While I do not agree with everything proposed, it remains the only bill moving through Congress that would prevent default and that cannot be ignored.”
Manchin continued, “Only the president can prevent this from becoming a full-blown domestic crisis. For the sake of our nation that we all serve, I urge the president to put politics and partisanship aside, come to the table and negotiate a real compromise that saves America from this impending economic catastrophe.”
Biden seems to have heeded that plea — so long as it isn’t called a debt ceiling negotiation.
Joshua Arnold is a staff writer at The Washington Stand.