As President Joe Biden prepared to welcome House Speaker Kevin McCarthy (R-Calif.) to the White House on May 9 to resume their debt ceiling negotiations, the pressure for the president to bend on the issue was on the rise.
The meeting—which will also involve Senate Majority Leader Chuck Schumer (D-N.Y.), Senate Minority Leader Mitch McConnell (R-Ky.), and House Minority Leader Hakeem Jeffries (D-N.Y.)—comes as Biden faces disappointing poll numbers and a united Republican front.
According to a Washington Post-ABC News
poll published on May 7, Biden’s disapproval rating has climbed to 56 percent—a three-point increase since Feb. 1, which was both the first and last date he met with McCarthy to discuss the debt limit.
In more than three months since, Biden has repeatedly declined to negotiate with the House speaker, insisting that Congress pass a “clean” increase to the federal government’s borrowing cap with no strings attached.
Meanwhile, McCarthy’s position was bolstered on May 6 when 43 Republican senators, including McConnell,
vowed to oppose any debt limit increase without concessions from Democrats on budget cuts.
As House Republicans have already passed a plan that accomplishes both parties’ primary objectives, the Republican leaders will enter the May 9 talks from a position of strength.
Mounting Pressure
The national debt is currently set at $31.4 trillion. When the United States reached that limit in January, the Treasury Department was forced to take “extraordinary measures” to create additional room for borrowing, thereby temporarily avoiding default.While the United States has never defaulted on its debt before, Treasury Secretary Janet Yellen warned last week that the federal government may break with that precedent as soon as June 1 if the debt ceiling is not raised.
That projection aligns with the latest analysis (
pdf) of the Bipartisan Policy Center, which estimates that the “X date”—the date when the federal government is unable to pay all of its bills on time and in full—is likely to occur between early June and early August due to the unexpected extension of tax filing deadlines for those in designated disaster areas in California, Alabama, and Georgia.
“The coming weeks are critical for assessing the strength of government cash flows,” said Shai Akabas, Bipartisan Policy Center’s director of economic policy, in a
statement. “If a solution is not reached before June, policymakers may be playing daily Russian roulette with the full faith and credit of the United States, risking financial disaster for their constituents and the country. Even now, the looming deadline is raising costs to the government, and therefore to all taxpayers.”
But with the potential for default drawing nearer, House Republicans have been quick to remind Biden and the Democrats that they alone have acted to address the issue.
“Not only did we show you a plan, we’re the only ones to pass a plan,” McCarthy
said during an April 26 news conference. “So, I think it’s up to [Biden] now.”
American Action Network, a conservative nonprofit advocacy group, agreed. On May 8, the group
launched a $250,000 TV ad campaign in the Washington media market urging Biden to negotiate.
“President Biden is driving America to its very first default, and there will be no one but him to blame,” American Action Network President Dan Conston said in a
statement.
Republican Plan
The Republicans’ “Limit, Save, Grow Act” would raise the debt ceiling by about $1.5 trillion—or through the end of March 2024, whichever occurs first—but would pair that increase with future spending cuts.
Biden criticized that plan on May 8 in a series of tweets,
asserting that it “slashes support for families, students, and veterans” and that it would “cut 60,000 teachers across America to help fund tax giveaways for the already-rich.”
But Republicans on the House Committee on Education and the Workforce
pushed back on that claim, noting that state and local governments provide most education funding and that the GOP plan only reduces spending to fiscal year 2022 levels.
“The president’s tweet is classic partisan spin, where any attempt at budget discipline is met with apocalyptic claims about reductions in popular government services,” the committee added.
Finding Common Ground
Although mixed with criticism, Biden also gave his first indication on May 8 that he might be willing to consider some spending cuts, noting in another
tweet that he was “all for cutting wasteful spending,” but that he differed with Republicans on what counts as “wasteful.”
Attached to that tweet, he shared a diagram indicating that Democrats would support cutting $160 billion in “wasteful spending on Big Pharma.”
Whether that option will be discussed remains to be seen, but with Biden set to speak on May 10 in New York on why Congress must avoid default, the White House does not seem optimistic that an agreement will be reached on May 9.
The president has also yet to close the door on the possibility that he might invoke the 14th Amendment to circumvent Congress and raise the debt ceiling himself.
The amendment states that the “validity of the public debt” of the United States “shall not be questioned.” However, given that the law has never been invoked for that purpose before, doing so would likely raise a swift and lengthy legal challenge.
And with the clock ticking down to the so-called “X-date,” business leaders noted on May 9 that it’s not just money the government is running out of, but also time.
“There are principled men and women serving in government in both political parties who understand the country cannot continue to prosper if we continue to govern from the edge of a cliff, budgeting from crisis to crisis without meeting our long-term obligations and setting a course of stability,” Michael Hanson, Retail Industry Leaders Association senior executive vice president of public affairs, told
The Hill.
Likewise, in a
statement, U.S. Chamber of Commerce Executive Vice President and Chief Policy Officer Neil Bradley stressed: “The full faith and credit of the United States government should never be placed at risk, which is why it is essential that Congress and the Administration quickly reach a bipartisan agreement to raise the debt ceiling.”
Specifically, Bradley highlighted permitting reform and discretionary spending as areas for potential compromise, noting that there has been bipartisan support for adjustments in those categories that could reduce the deficit.
“We urge the president and the congressional leaders of both parties to quickly resolve the current debt limit impasse, and there are no two better places to start than permitting reform and an agreement on spending caps.”
