Playing a dangerous game of chicken with the U.S. economy over the debt ceiling, 80–year-old President Joe Biden and 58-year-old House Speaker Kevin McCarthy (R-Calif.) continue to haggle over various aspects of the budget including requiring recipients of Medicaid and Food Stamps to commit to work requirements. McCarthy says the two sides remain far apart from a deal while Biden expressed optimism over getting some kind of workable deal. Biden and McCarthy designated work groups to resolve any remaining details to satisfy conservative Republicans looking to reduce government spending, something Democrats resist to doing. “It never is a good to characterize a negotiation in the middle of negotiation,” Biden said, reluctant to tell reporters about any specifics. “I remain optimistic because I’m a congenital optimist . . . ,” Biden told the press.
McCarthy isn’t so optimistic about getting a workable deal before the government is forced to default on its credit obligations, including paying Medicare and Social Security recipients. “But I really think there’s a desire on their part, as well as on ours, to reach and agreement, and I think we’ll be able to do that,” Biden said, showing a willingness to make compromises with McCarthy. McCarthy was far more skeptical whether Biden could deliver on a deal meeting conservative demands. McCarthy said he wants a deal completed by the weekend to insure that any default can be avoided. “It doesn’t seem to me yet they want a deal., it just seems like they want to look like there in a meeting but they aren’t taking anything serious,” McCarthy said, not sharing Biden’s optimism about a debt ceiling deal. Republicans must agree to increase the debt ceiling by $1.5 trillion.
Republicans want “energy-permitting reform,” allowing for easier oil-and-gas drilling, something Democrats had opposed. Biden expressed a willingness to compromise on fossil fuel development. McCarthy and other top Republicans called energy their top priority, given the oil shortage from the Russian oil embargo with the Ukraine War. “President Biden has elevated this issue to the highest levels of government,” said White House senior adviser John Podesta. Getting rid of red tape for both clean energy and fossil fuel development has been a top priority for Republicans. “No matter what you want to build, it simply takes too long,” said Sen. Joe Manchin (D-W.V.), a key Senate voice pushing for more energy independence. Republicans want unspent Covid-19 funds [$50 to 70 billion] returned to the general fund to reduce the nation’s growing budget deficit now at over $1.4 trillion.
Areas of agreement between Democrats and Republicans look to improve as the deadline to complete a deal gets closer. Neither side wants a default, with possible fallout crashing the stock market and driving the economy into recession. Biden and McCarthy expect to meet Tuesday to discuss contours of a debt ceiling deal. Both sides want to avoid a default, something that would potentially downgrade the U.S. credit rating. Heading into 2024, Republicans don’t want voters blaming them for any stock market downturn and recession, potentially driving voters to reelect Biden. Congressional Budget Office said there’s a significant risk the government could run out of funds by June 1 without a deal completed in the next week. “The government will have to delay making payments for some activities, default on its debt obligations or both,” said the Congressional Budget Office.
Democrats talked about Biden invoking a never-used clause in the 14th Amendment to assert the debt ceiling is unconstitutional, not subject to Congressional wrangling. Biden expressed reservations about a Constitutional test throwing the issue into the federal courts, something that could delay any default, causing widespread damage to the economy. Trying to get rid of the debt ceiling would take benefit both parties but would have an unknown fate in the courts. Biden doubts invoking the 14th Amendment “would solve the problem now,” preferring negotiation to come up with a debt ceiling plan that works for both sides of the aisle. Democrats seem more willing to make concessions on energy, work conditions on entitlements and, most importantly, mitigating red tape on drilling for more fossil fuels. Whether McCarthy’s conservative caucus goes along is anyone’s guess.
Treasury Secretary Janet Yellen, 75, made a strong case for resolving the debt ceiling issue before it’s too later. There’s more areas of common ground for Republicans and Democrats to let the government run out of funds June 1. “Default would be avoided, period,” said Sen. Cynthia Lummis, saying Biden and McCarthy “acre going to have to negotiate through this.” Biden knows that invoking the 14th Amendment could make things a lot worse by throwing the matter into the federal courts. Both parties need swift action on a debt ceiling agreement. No American consumer wants to watch their investment accounts plummet or watching unemployment spike, leading to recession. Biden and MdCarthy have it plenty of opportunity to compromise and fix the problems for the American public. Default serves no one’s interest on both sides of the aisle, prompting Biden and McCarthy to get serious.
About the Author
John M. Curtis writes politically neutral commentary analyzing spin in national and global news. He’s editor of OnlineColumnist.com and author of Dodging The Bullet and Operation Charisma.
