Biden and McCarthy Offer Glimmers of Hope for a Debt Limit Deal
The Debt

Biden and McCarthy Offer Glimmers of Hope for a Debt Limit Deal

Yuri Gripas/ABACA Press

President Joe Biden and congressional leaders emerged from a White House meeting Tuesday afternoon sounding hopeful that a deal could be reached to fund the federal government and raise the national debt limit in time to avoid a potential economic disaster.

“We just finished another good, productive meeting with our congressional leadership about a path forward to make sure that America does not default on its debt,” Biden said afterward at a White House event. “There is still work to do, but I made it clear to the speaker and others that we’ll speak regularly over the next several days.”

A White House summary of the meeting said that, “while more work remains on a range of difficult issues,” Biden is “optimistic that there is a path to a responsible, bipartisan budget agreement if both sides negotiate in good faith and recognize that neither side will get everything it wants.”

The White House also said that Biden would cut short his planned trip to Asia and return home on Sunday, after the G7 summit in Hiroshima, Japan, so he can be back for further talks and ensure that the country can avoid a debt default.

“I think we set the stage to carry on further conversations,” House Speaker Kevin McCarthy told reporters outside the White House. McCarthy said that the two sides remain far apart, but he added: “It is possible to get a deal by the end of the week. It’s not that difficult to get to an agreement.”

Senate Majority Leader Chuck Schumer called the meeting productive and respectful. “What gave me the most hope,” Schumer added, “is that everyone, including the speaker, agreed we need to be bipartisan.”

With the deadline for raising the borrowing limit looming as soon as June 1 and McCarthy insisting that a deal must be done soon to allow for the House and Senate to pass it, the talks appear to be entering a new, more urgent and more focused phase.

“The president agreed to appoint a couple of people from his administration to sit down and negotiate directly with my team,” McCarthy said, “so I found that to be productive personally, but we’ve got a lot of work to do in a short amount of time.”

Office of Management and Budget Director Shalanda Young and presidential counselor Steve Ricchetti will reportedly lead the talks on the White House side, while Rep. Garret Graves, a close McCarthy ally, will work with the speaker’s staff on the GOP side.

The administration has long insisted that it will not negotiate over raising the debt limit, which it said Congress should do without conditions. Reporters on Tuesday suggested that the administration appears to be doing precisely what it said it would not do, though the White House insists that it is working on a budget deal, not a debt-limit hike. But some Biden aides reportedly admit privately that the lines are fuzzy and that the debt limit is a key part of ongoing talks.

“Democratic negotiators also acknowledge,” says The Washington Post, “that they will have to agree to more spending cuts if they want to secure a longer extension of the debt ceiling — an implicit recognition that lawmakers are bartering over the full faith and credit of the U.S. government, an approach Biden has repeatedly disavowed.”

Will Democrats stick together? McCarthy told reporters that new work requirements for federal benefit programs must be included in the deal. Biden this weekend seemed to leave the door open to some stiffer work requirements, though not for Medicaid, when he said that he had supported reforms as a senator. That set off alarms for some progressives, who fear that Biden might “cave” on GOP demands including long-term spending caps and stiffer work requirements for food stamps.

Biden and the White House have insisted that they won’t accept any proposal that causes people to lose their health coverage or drives Americans into poverty. The president tweeted Monday that the Republican “wish list would put a million older adults at risk of losing their food assistance and going hungry.”

But progressives worry that talks are heading in a troubling direction.

“I cannot support a deal that is only about hurting people,” Democratic Sen. Elizabeth Warren said, per The Washington Post. “If the Republicans are really serious about lowering the amount of the national debt then, by golly, let’s bring in some revenues.”

Dean Baker, an economist at the left-leaning Center for Economic Policy and Research, told the Post that there’s an important principle at stake: “If you accept the idea that you can, in essence, be held to blackmail with the debt ceiling, it will be done again and again. Not to be crass, but it’s essentially negotiating with terrorists who have taken hostages,” he said. “More and more people in progressive circles are becoming concerned with it.”

Will Republicans stick together? Senate Republicans have insisted that it’s up to McCarthy and Biden to work out a deal, but some are reportedly worried that House conservatives may balk at any agreement that Democrats would accept — and the parameters of the compromise reportedly being discussed by negotiators would fall well shy of the far-right wish list passed by House Republicans. Some House conservatives have since added their border security bill to the wish list. “We don’t want to default. At some point, we’re going to have to find a way through this,” Republican Sen. Shelley Moore Capito of West Virginia told Politico. “And it really hinges on the Republicans on the House side pulling together as much as they can.”

Alternatively, if McCarthy does suffer some defections from his most conservative members — or an outright rebellion seeking to end his speakership — moderate Democrats may be willing to come to the rescue, Politico reports. “A small group of moderate Democratic lawmakers has quietly reassured its House GOP counterparts that it can help protect McCarthy’s gavel if his right flank revolts over a debt agreement,” Sarah Ferris and Nicholas Wu write, citing two sources familiar with the discussions. “If conservatives responded to a McCarthy-Biden deal by forcing a full House vote on ousting the California Republican, Democrats say they have enough members to help block it — keeping him in power.”

A McCarthy spokesperson reportedly dismissed such talk to Politico, saying that the speaker “has never heard of this garbage.” Politico also notes that John Boehner wound up resigning rather than relying on a similar offer from some Democrats that could have let him keep his gavel.

Still, the chatter highlights the challenges involved in reaching a debt-limit agreement that can pass both chambers of Congress — and a reminder that things could still get very weird.