Biden Warns ‘Meteor’ Headed for US Economy

Biden Warns ‘Meteor’ Headed for US Economy

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Plus, a new deadline for Democrats
Monday, October 4, 2021

Biden Blasts McConnell Over ‘Reckless’ Debt Limit Refusal

President Joe Biden on Monday demanded that Republicans "stop playing Russian roulette with the U.S. economy."

Speaking to the press at the White House, Biden charged Republicans with being "hypocritical, dangerous and disgraceful" for blocking efforts by Democrats to raise the federal debt ceiling.

Senate Republicans have refused to allow votes on two bills that would increase the debt limit, pushing the nation closer to a fiscal crisis that could arrive as soon as October 18, when the U.S. Treasury says it could run out of money to meet the country’s financial obligations.

"A meteor is headed to crash into our economy," Biden said. "Democrats are willing to do all the work stopping it. Republicans just have to let us do our job. Just get out of the way. If you don’t want to help save the country, get out of the way so you don’t destroy it."

Biden noted that Republican policies added significantly to the debt when former President Donald Trump was in the White House, during which time Democrats voted on a bipartisan basis three times to raise the debt limit. "Now they won't raise it, even though they're responsible for the more than $8 trillion in bills incurred in the previous administration," Biden said.

"Let me be really clear," Biden added. "Raising the debt limit is about paying off our old debts. It has nothing to do with any new spending being considered. It has nothing to do with my plan for infrastructure or ‘Building Back Better.’"

McConnell unmoved: In a letter to Biden released publicly Monday, Senate Minority Mitch McConnell (R-KY) blamed Democrats for failing to take the necessary steps to raise the debt ceiling on their own.

"I write in that spirit to express concern that our nation is sleepwalking toward significant and avoidable danger because of confusion and inaction from the Speaker of the House and the Senate Democratic Leader concerning basic governing duties," McConnell wrote, again making it clear he accepts no responsibility for the burgeoning crisis.

McConnell pressed his case for Republican inaction, saying that he was simply following a precedent set by Democrats, including then-Sen. Biden, who refused to back increases in the debt ceiling when Republicans were in control of the government under President George W. Bush. "Your view then is our view now," McConnell wrote, adding that the "debt limit is often a partisan vote during times of unified government."

Still no clear path forward: Senate Majority Leader Chuck Schumer (D-NY) said Monday that lawmakers must take steps to raise the debt ceiling in the next few days. "Let me be clear about the task ahead of us," he wrote in a letter to colleagues. "[W]e must get a bill to the president’s desk dealing with the debt limit by the end of the week. Period."

Schumer did not indicate how he plans to go about raising the debt limit, saying that Democratic lawmakers would discuss the matter at a private meeting on Tuesday.

Schumer did say that he plans to hold another vote later this week on a House-passed bill that would suspend the debt ceiling until December 2022, but Republicans are expected to block the effort once again.

Risky bets: Democrats and Republicans appear to be doubling down on their game of chicken, each gambling that the other side will swerve first. Republicans are betting that Democrats will pass a debt ceiling increase on their own via the reconciliation process — the path McConnell has been pushing for weeks. Democrats say they don’t want to take that route, and time is running short for the complex legislative process that could take weeks to complete.

Democrats appear to be betting that Republicans will back down once it’s clear that there is no time to use the reconciliation option. They need just 10 Republicans to end the filibuster on a debt ceiling bill, which could then pass with just 50 Democratic votes. Alternatively, Democrats could break the filibuster rule and skip directly to a vote.

Whichever way it goes, it’s clear that the chances of an unplanned debt crisis are rising. Asked if he could guarantee the debt ceiling would be addressed in time, Biden said, "No I can't. That's up to Mitch McConnell."

Democrats Look for Nearly $2 Trillion in Cuts to Biden Plan

Democrats may have failed to come together last week to pass the $1 trillion bipartisan infrastructure bill, but the drama surrounding the postponed vote accomplished two things.

First, it made clear that the infrastructure legislation and a multitrillion-dollar package to expand the social safety net and combat climate change are linked, despite the wishes of some centrists in the party.

Rep. Pramila Jayapal, chair of the Congressional Progressive Caucus, told CNN on Sunday that her members, by blocking a vote on the bipartisan infrastructure bill, have helped push President Biden’s core agenda back on to the table, reestablishing the linkage between both pieces of legislation. "We’ve put the bills back together, as was the original agreement, and we are going to deliver both bills — the infrastructure bill, which is important, and the Build Back Better Act," she said.

Second, it made plain that the $3.5 trillion topline sought by progressive for that larger package will wind up being reduced significantly.

The new deadline for both bills is October 31. President Biden on Saturday signed into law a 30-day stopgap extension for transportation programs that had seen their funding lapse when the fiscal year ended on Thursday. The short-term authorization, passed by the House on Friday and the Senate on Saturday, allows 3,700 Department of Transportation employees to return to work after being briefly furloughed. And it sets up a Halloween deadline for the bipartisan infrastructure bill and Biden’s Build Back Better Act focused on social programs.

"It is crucial that the House, Senate and President come to a final agreement on the details of the Build Back Better Act as soon as possible, preferably within a matter of days, not weeks," Senate Majority Leader Chuck Schumer wrote in a Monday letter to Senate Democrats. He added: "Not every member will get everything he or she wanted. But at the end of the day, we will pass legislation that will dramatically improve the lives of the American people. I believe we are going to do just that in the month of October."

To do it, Democrats will have to quell some anger, overcome some major differences — and make nearly $2 trillion in cuts to the budget bill.

The anger was evident in statements by centrists. Sen. Kyrsten Sinema (D-AZ) called the delayed House vote on the bipartisan infrastructure package she helped negotiate "inexcusable, and deeply disappointing for communities around our country." She also warned that the move further erodes the trust necessary in negotiations. And Representative Josh Gottheimer (D-NJ) fumed that a "small faction on the far left" was employing what he called "Freedom Caucus tactics" to put Biden’s agenda at risk. "We were elected to achieve reasonable, commonsense solutions for the American people — not to obstruct from the far wings," he said.

As for the size and substance of the budget package, the White House has set a topline target range of $1.9 trillion to $2.3 trillion, slightly above the $1.5 trillion demanded by Sen. Joe Manchin (D-WV), a key vote in the Senate. Getting there will require some difficult choices, as Politico notes: "They can toss overboard entire policies. They can make some programs less expensive through means-testing (Manchin’s preference). They can create programs with shorter lifespans and hope that they get renewed. They can engage in myriad types of budgetary gimmickry."

We’ll venture a not-so-bold prediction: some budgetary gimmickry will be involved.

Jayapal on Sunday insisted that Manchin’s $1.5 trillion ceiling is too low. "That’s not going to happen," she told CNN CNN. "That’s too small to get our priorities in. It's going to be somewhere between 1.5 and 3.5, and I think the White House is working on that right now because, remember, what we want to deliver is child care, paid leave and climate change, housing."

Jayapal said that the focus of Democrats’ debate should be on the substance of the legislation rather than the price tag. "What we've said from the beginning is that it's never been about the price tag. It's about what we want to deliver," she said. "The critical thing is let's get our priorities in and then we will figure out what it actually costs."

She added that Biden had also asked Democrats to start with the policies they support rather than thinking about the topline number. And she suggested that negotiators could trim the price tag of $3.5 trillion over 10 years by cutting some smaller items from the legislation and then funding some larger priorities for a shorter period of time.

Jayapal also pushed back on a number of Manchin’s specific demands. She flatly rejected his insistence that reconciliation package must include what’s known as the Hyde Amendment, which restricts Medicaid payments for abortion. And she questioned his call for means testing to limit benefit programs to lower-income earners. "I have been consistent in my belief that any expansion of social programs must be targeted to those in need, not expanded beyond what is fiscally possible," Manchin said. But Jayapal argued that means testing will be counterproductive. "All of the research shows means-testing actually doesn’t target it more but it does create a lot of administrative burden and a lot more cost," she told CNN.

The bottom line: "Massive legislation is rarely passed in Washington without near disasters," CNN’s Stephen Collinson writes. "The prospect of failure is often the only thing that prods warring factions toward compromise." One failure may not be disastrous, but Democrats probably can’t afford another.


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