Will Biden Ultimately Negotiate on the Debt Limit?
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Will they or won’t they? The White House insists that raising the debt limit is the responsibility of Congress and that it won’t negotiate with Speaker Kevin McCarthy (R-CA) and House Republicans who are demanding concessions on spending in exchange for any increase in the borrowing limit.
“President Biden looks forward to meeting with Speaker McCarthy to discuss a range of issues, as part of a series of meetings with all new Congressional leaders to start the year,” White House Press Secretary Karine Jean-Pierre reiterated in a statement Friday. “Like the President has said many times, raising the debt ceiling is not a negotiation; it is an obligation of this country and its leaders to avoid economic chaos. Congress has always done it, and the President expects them to do their duty once again. That is not negotiable.”
McCarthy is still pushing for talks, though, and many analysts are skeptical that the White House will be able to hold out, suggesting that Biden’s team will come to the table eventually — though any deal might not be with House Republicans. “Ultimately [Senate Majority Leader Chuck] Schumer, [Senate Minority Leader Mitch] McConnell and Biden will figure something out,” Jim Kessler, executive vice president for policy at centrist Democratic think tank Third Way, told The Hill. “In the end, I think the likelihood is the agreement will come out of the Senate and the House will be forced to take it.”
What might a deal look like? Sen. Joe Manchin, the centrist Democrat from West Virginia, has floated the idea of another bipartisan commission to consider entitlement reforms.
Matthew Yglesias argues in a Bloomberg Opinion piece that the idea just might work this time, noting that the economic environment and interest rate picture are far different than they were in 2011. “Under the circumstances, a call for deficit reduction actually makes sense,” he writes.
And the politics have shifted, too. “House Speaker Kevin McCarthy and his colleagues have painted themselves into a corner on this issue. … In short, nobody in the Republican Party within six feet of a competitive election wants to run on big entitlement cuts. Which is why, for all the drama in the House, Republicans are nowhere near to producing a plan that has anything like 218 votes.”
Biden, meanwhile, is less driven to cut a grand bargain than Obama was, Yglesias argues: “He seems less convinced than Obama was of the merits of entitlement reform, and more willing than Obama was to simply go with the flow rather than trying to persuade Republicans to raise taxes.”
The result could be that the idea of a bipartisan committee could wind up with some momentum.
“My sense here is, and Biden’s been here before — he went through it in 2011 — at the end of the day it’s not ‘My way or the highway.’ He has to give something to Congress and Congress has to give to something to him,” Bill Hoagland, senior vice president at the Bipartisan Policy Center and a former Senate Republican leadership aide, told The Hill, adding that some kind of limit on discretionary spending is likely.
The question then might become what comes out of any committee. “The big question will be if there is an enforcement action tied to the ‘Rescue’ Committee,” writes Cowen analyst Chris Krueger. “Many of the folks in the White House still carry scar tissue from the 2011 fight. We would be surprised if any enforcement mechanism was attached to a Rescue Committee.”
