The risks and pressures of a coming debt showdown with Republicans are quickly mounting for President Joe Biden, who is expected to announce a reelection bid as soon as next week.
Most attention so far has been on House Speaker Kevin McCarthy’s perilous effort to unite his fractious party and preserve his tiny majority. But the White House and top Democrats are insisting that they won’t engage with McCarthy’s demand for sweeping spending cuts in exchange for the House agreeing to lift the government’s borrowing limit to avert a disastrous debt default and a possible financial crisis this summer.
The administration’s logic is that if hostage takers get concessions they will just demand more.
But the first signs of skittishness are emerging among some Democrats on Capitol Hill in a worrying sign for the administration ahead of tense weeks that could define Biden’s domestic legacy and decide whether McCarthy can keep his slender grip on power.
Several House Democrats on Thursday expressed the hope that the president would negotiate with McCarthy. Their concerns appeared to undermine Biden’s position and raised new questions about how long his reluctance to bargain can be sustained.
“I think Joe Biden should be talking to Kevin McCarthy, even if those conversations right now prove nothing productive,” Rep. Jared Moskowitz, a freshman Florida Democrat, told CNN’s Manu Raju. Michigan Democratic Rep. Debbie Dingell warned: “We have to get this figured out,” adding, “The United States cannot default.”
Democratic Sen. Joe Manchin, who’s up for reelection in deep-red West Virginia next year and is no stranger to breaking with the White House, called out “a deficiency of leadership” while praising McCarthy for offering a proposal.
But such comments are unlikely to immediately shift what appeared to be a hardening White House position on Thursday. And Biden got a firm endorsement of his approach from Senate Majority Leader Chuck Schumer, who insisted that the debt ceiling must be raised with no concessions, warning, “No brinkmanship, no hostage taking. Clean. Clean. Clean.”
The New York Democrat’s role in bolstering Biden’s approach will be crucial. But signs of concern among other party members do raise the possibility that the White House has work to do to shore up support for its stand among allies on Capitol Hill.
The first signs of a shift in the politics of the debt ceiling fight come as both the White House and McCarthy seek to prime public opinion for a collision on an issue that might seem bewildering to voters but that could have the nation racing toward a crisis before long.
Since the government takes in less money in revenue than it spends, it needs to borrow money to meet its obligations. But it has reached the previous limit authorized by Congress, at over $31 trillion, and only Congress can raise that ceiling. For most of modern history, this hasn’t been an issue, but Republicans – who have previously voted to raise the limit under GOP administrations – now want to leverage this moment to try to kill off Biden’s agenda.
Both sides are essentially laying the same bet in this game of Russian roulette with the US economy. The assumption is that the consequences of a default would be so disastrous that the other side will eventually be forced to blink to avoid taking the blame.
Biden appears to have the political and moral high ground at the outset of the clash because only Congress has the capacity to expand the government’s ability to borrow money to pay for spending that it has already authorized. The White House also appears to have calculated that McCarthy will never be able to unite his party. And even if Biden did decide to horse trade positions and programs with the speaker, there’s no guarantee that McCarthy could pass anything given the radical nature of his conference.
The White House also argues that since the debt limit needs to be raised to pay for past spending – including by ex-President Donald Trump – the House has a moral obligation to act.
The speaker has tried to counter these two liabilities by increasing his demands for Biden to negotiate – including with a trip to Wall Street this week – and by portraying the president as unreasonable and obstinate, while fashioning a bill raising the debt ceiling in exchange for huge spending cuts. In order to win this confrontation – assuming he can bring his party with him – McCarthy needs to shift the blame equation to the president.
The California Republican has beseeched his party to get behind a bill as a way of forcing Biden to the negotiating table. But the measure is purely tactical since it’s got no chance of passing the Democratic-led Senate. There is not even any guarantee McCarthy, who can only afford to lose four votes, can corral House lawmakers on the left or the right of his party to get behind it. Further down the road, fears of a default are being exacerbated by real doubts that he could sell any possible concession he could get out of Biden to a conference that sees compromise as surrender.
Biden says he’s happy to talk – in the framework of budget talks with Republicans – but cannot offer concessions until Republicans stop risking the financial wellbeing of millions of Americans who could see market-linked savings tumble and job losses in the event of a default. And the White House is taking aim at aspects of McCarthy’s plan, arguing that it will punish less affluent Americans, while sparing the rich, and could kill a manufacturing rebound in the heartland.
The potential weakness in the president’s approach lies in the intricacy of the issue. While his position makes sense to those well versed in congressional procedure, it will be much harder to sell to the public, which may not realize raising the debt ceiling is Congress’ burden. The distinction between a debt ceiling negotiation and budget talks may seem semantic to many Americans, and the risk for Biden is that voters view both sides as equally dysfunctional.
Politically, Biden cannot afford to be seen as caving to Republicans – both in order to preserve the authority of his presidency and to send a signal of strength as he is expected to launch his reelection bid. Biden’s small circle of close-knit advisers and allies are preparing for a video announcement Tuesday that would coincide with the anniversary of his campaign announcement in 2019, CNN reported Thursday, citing four sources familiar.
But there are also signs of an evolving White House strategy. The administration is pairing its insistence that Republicans are taking unreasonable risks with the economy for political reasons with increasing attacks on the details of McCarthy’s plan.
“We cannot hold America’s full faith and credit hostage,” Mitch Landrieu, a White House senior adviser responsible for implementing Biden’s bipartisan infrastructure law, told CNN’s Jake Tapper on Thursday. “The debt ceiling is not something to be trifled with.”
White House press secretary Karine Jean-Pierre on Thursday sought to align Biden with middle-class Americans when she described items in McCarthy’s plan, which includes new work requirements for Medicaid, as “cruel.”
“We saw what Speaker McCarthy and the MAGA wing of the Republican Party put forth,” she said, arguing it would “really harm American families who are struggling every day to make ends meet.”
“The president has been very clear. … Show me your budget and I’ll show you what you value. We have seen what the Republicans in Congress, in the House specifically, along with the speaker, Speaker McCarthy, values.”
Read the full article here
