Top House Republicans say they want to negotiate spending cuts in exchange for lifting the statutory debt limit, but President Joe Biden and congressional Democrats say they’re not willing to entertain a negotiation.
The dynamics provide for initial stalemate as Treasury Secretary Janet L. Yellen told lawmakers Friday that the department will be forced to deploy “extraordinary measures” this week to remain under the $31.4 trillion statutory borrowing cap. Those accounting tools may not last beyond early June, Yellen said, suggesting Congress will need to act by then.
Speaker Kevin McCarthy has said several times in recent days that he told President Joe Biden he’d like to sit down early and begin discussing the debt ceiling and spending cuts. But the White House’s official position is it will not negotiate, saying Congress is obliged to lift the debt ceiling to ensure the government can keep paying its bills without the threat of other policy demands.
“I’d like to sit down with all the leaders, especially with the president, and start having discussions,” McCarthy told reporters at the Capitol on Tuesday. “I think it’s a sign of arrogance if you would say he wouldn’t even discuss it.”
White House Press Secretary Karine Jean-Pierre said at her press briefing Tuesday that the debt limit should be lifted “without conditions.”
“We have been very, very clear about that,” she said. “We are not going to be negotiating over the debt ceiling.”
Jean-Pierre rejected the idea of a formal sit-down with Republicans, saying the debt ceiling should not be used as a “political football.” But she added that the White House is engaged in “constant conversations” with members of Congress and their teams.
‘Fiscally demented’
Biden has not opened the door to negotiations either. In a speech Monday at the National Action Network’s Annual MLK Day Breakfast he mocked Republicans for talking about “big-spendin’ Democrats” when the deficit dropped by roughly $350 billion in fiscal 2021 and more than $1 trillion in fiscal 2022 under his party’s control.
“They’re fiscally demented, I think,” Biden said of Republicans. “They don’t quite get it.”
McCarthy suggested the White House and Democrats will be to blame if they choose not to engage, given Republicans’ advance warning they won’t support a debt limit increase without changes to government spending.
“Who wants to put the nation in some type of threat at the last minute [on the] debt ceiling? Nobody wants to do that,” he said. “That’s why we’re asking, let’s change our behavior now, let’s sit down … find the common sense compromise that puts us back onto a balanced budget.”
Senate Majority Leader Charles E. Schumer and House Minority Leader Hakeem Jeffries did not specifically call for a clean debt limit increase in a joint statement Friday but reiterated their view that doing so is simply “about meeting obligations the government has already made.” They said Democrats want to “move quickly to pass legislation addressing the debt limit,” noting the effort should be bipartisan and without drama.
“We’ve seen in previous debt ceiling stand-offs that even the threat of default leads to even higher costs for working families,” the New York Democrats said. “Republican leaders must do the right thing to protect Social Security, the economy, and our country.”
House Ways and Means Democrat Dan Kildee of Michigan said on MSNBC on Monday that McCarthy will have to decide whether to bring a clean debt limit bill to the House floor, but if he did, it would likely pass.
“I believe the Democrats and many thoughtful Republicans would come together and say, look, the argument over tax policy, the argument over spending ought to take place through the normal legislative process not at the point of a gun, not under this threat,” Kildee said.
No specific asks yet
Republicans have not yet settled on a specific demand. But McCarthy’s comments Tuesday and in other recent media appearances suggest he’s interested in some kind of deal that would force Congress to adopt a budget that would enforce specific spending caps for at least fiscal 2024. Appropriators would then write spending bills to those numbers.
“Any household, if they were misspending, the first thing they’d do is set a budget. Why wouldn’t we request the House and Senate to do a budget, appropriations where we approve funding?” McCarthy said.
McCarthy criticized the Senate for not passing appropriations bills last year and instead jamming lawmakers with a $1.7 trillion omnibus spending package in December. With Republicans in control of the House, another omnibus “is totally off the table,” he said.
House Republicans have already agreed they will write their fiscal 2024 appropriations bills to fiscal 2022 levels, which would cut $130 billion from the recently enacted fiscal 2023 omnibus. They would likely try to get Democrats to agree to do the same as part of a debt ceiling negotiation.
Despite the focus on discretionary spending, McCarthy and Republicans haven’t ruled out changes to mandatory spending programs other than key lawmakers promising they won’t cut Medicare and Social Security benefits for current and near-term beneficiaries.
“You’ve got to protect Medicare and Social Security,” McCarthy said. “And the path that the Democrats are going, they’re going to go bankrupt. So the thing I look at is let’s sit down and find a place that we can protect Medicare and Social Security for the future generations.”
Rep. Matt Gaetz, R-Fla., one of the 20 Republicans whose initial opposition to McCarthy becoming speaker led to commitments from the GOP leader on cutting spending, suggested adding work requirements to some mandatory spending programs, like the 2010 health care law’s Medicaid expansion, could be an area for bipartisan agreement.
“We should not engage in brinksmanship,” Gaetz said Saturday on CNN. “We have an obligation as the Republicans in the majority to sell to the American people work requirements or other spending reductions to get buy-in on that.”
Demonstrating what little room to maneuver McCarthy has with a four-seat margin on party-line votes, some in his conference say they won’t vote for a debt ceiling increase under any circumstances.
“We cannot raise the debt ceiling,” Rep. Andy Biggs, R-Ariz., tweeted on Tuesday. “Democrats have carelessly spent our taxpayer money and devalued our currency. They’ve made their bed, so they must lie in it.”
‘Knife fight’
Even some more moderate House Republicans are ready to use the debt limit as leverage for changes in spending.
“There will be Republicans who will say, we need to reform, we need to use this as a vehicle to try to put some limits on our spending, on our debt and our deficits. And I am one of them,” Rep. Chris Stewart, R-Utah, said Sunday on CBS’ “Face the Nation.” “Can we reconcile that with, at the same time, we don’t want to harm the credit of the United States government? That’s our goal. I think Republicans are aligned on that.”
Rep. Tony Gonzales, R-Texas, said he is open to spending “reforms” but he is wary of cutting defense spending. He was the lone Republican to vote against the House rules package because he worried the separate commitment McCarthy made during negotiations over the speaker race to limit spending to fiscal 2022 levels would lead to defense cuts, although negotiators have said that nondefense accounts were their focus.
“The debt ceiling is no doubt going to be a knife fight. That’s why we have to start early,” Gonzales said on “Fox News Sunday.” “I’ve been of the mindset, no defense cuts without reforms. And the key here is reforms. If you just cut defense and expect the national debt to go down, that’s not going to happen. The only thing you’re going to do is hurt defense.”
Biden refusing to negotiate is “a nonstarter” after Republicans campaigned and won control of the House on a message of controlling reckless spending, Nebraska GOP Rep. Don Bacon said Sunday on ABC’s “This Week.”
“But on our side, we have to realize, we control the House with a four-seat majority, the Senate is run by the Democrats with a one-seat majority, and the president [is] obviously from the Democrat Party,” he said. “So we can’t get everything we want either.”
Megan Mineiro and Niels Lesniewski contributed to this report.
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