Congress left the Capitol this week with no deal on averting a catastrophic debt ceiling default that may be as close as three weeks away.
According to NBC News, a meeting scheduled for Friday between President Joe Biden and House Speaker Kevin McCarthy (R-CA) was postponed until next week while top aides hash continue to negotiate in the hopes of making more headway before the principal negotiators are brought in.
For weeks, the negotiations have boiled down to Democrats insisting that Republicans agree to a ‘clean’ (blank check) debt ceiling increase with no conditions, while Republicans demand that Democrats make spending compromises which would pair a debt limit increase with a budget agreement.
With the debt limit having been raised, avoiding economic catastrophe, the GOP could claim Democrats backed down from the no-negotiations posture and Democrats could claim some wins in the budget talks and focus on those.
A potential bipartisan deal would “take the budget negotiations and kind of blend it in with the raising of the debt ceiling,” said Sen. Lindsey Graham, R-S.C., a member of the Budget Committee tasked with selecting topline spending figures for the government annually and of the Appropriations Committee, which doles out that funding. “We’ve eventually got to fund the government” in September, he noted. –NBC News
“Maybe they can agree on some top lines that would show some fiscal restraint and raise the debt ceiling, but we’ll get there,” said Graham.
Rep. Garret Graves (R-LA) outlined four policy areas where Republicans and Democrats may be able to strike a deal;
- Recapturing unspent Covid relief funds
- Overhauling the permitting process for infrastructure and energy projects
- Establishing spending caps for upcoming government funding bills
- Expanding work requirements for those receiving federal aid
“I think there’s a pretty good opportunity there,” said Graves, a top ally of McCarthy.
Rep. Dusty Johnson (R-SC) thinks the four areas are the “lowest hanging fruit” that could see bipartisan consensus.
“The White House has said that all of these Republican asks are nonstarters. They will say they won’t accept anything. We know they will,” said Johnson, who chairs the GOP Main Street Caucus.
“I’ll take it anywhere I can get it. We’re working to get it,” said Sen. Joe Manchin (D-WV). “This should be a bipartisan permitting reform bill.”
Democrats have seized on Wednesday night comments made by former President Trump, who told CNN‘s Kaitlan Collins during a town hall: “I say to the Republicans out there – congressmen, senators – if they don’t give you massive cuts, you’re going to have to do a default.”
According to Trump, while he doesn’t think a default is likely, “it’s better than what we’re doing right now because we’re spending money like drunken sailors,” adding that the effects of a default might not be as disastrous as everyone expects, suggesting “it’s really psychological more than anything else,” and adding “maybe it’s, you have a bad week or a bad day.”
“We might as well do it now” — Trump endorses a US debt default pic.twitter.com/l81cW3bwH9
— Aaron Rupar (@atrupar) May 11, 2023
“It was dangerous and irresponsible that former President Trump last night said, casually, ‘Eh, just go ahead and default.’” said Sen. Chris Coons (D-DE) in a statement to NBC News.
Pressed about Trump’s comments encouraging default, McCarthy quickly pivoted Thursday to attacking Biden and repeatedly made the case that House Republicans are the only ones in Washington who have passed legislation to raise the debt ceiling. The McCarthy package would raise the federal borrowing limit by $1.5 trillion or through March, whichever comes first, but it would roll back key pieces of Biden’s agenda. -NBC News
“I’ve watched President Biden not want a deal and want default,” McCarthy told reporters on Thursday – attacking Democrats over the impasse, saying that House Republicans are “the only ones who’ve raised the debt limit.”
According to the Treasury Department, the country will default on its debt as soon as June 1 unless the borrowing limit is raised.
Tyler Durden
Fri, 05/12/2023 – 10:40
