Mccarthy sees no ‘movement’ on debt limit deal in meeting with Biden
WASHINGTON — The last time House Speaker Kevin Mccarthy sat down with President Joe Biden in the Oval Office, he struck a firm but hopeful tone, telling reporters that the pair could “find common ground” to avert a calamitous default on U.S. debt.
Ninety-seven days later, as Mccarthy met with the president Tuesday for only the second time since he became speaker, both sides were no closer to a compromise — paving a perilous path toward a historic default that would reverberate across the global economy.
“I didn’t see any new movement,” Mccarthy said after meeting with Biden and House Democratic leader Hakeem Jeffries, D-N.Y.; Senate Majority Leader Chuck Schumer, D-N.Y.; and Minority Leader Mitch Mcconnell, R-KY.
House Republicans have refused to raise the $31.4 trillion debt limit unless it’s paired with discretionary spending cuts. Biden and Democrats insist they won’t negotiate on budget cuts unless Congress agrees to separately increase the legal borrowing limit without conditions.
The pivotal meeting also marked the biggest test yet for Mccarthy, who needs to balance the urgency of raising the debt limit with satisfying far-right conservatives who could end his speakership.
The California Republican clinched the gavel in January by caving to the hard-line faction of his party, striking a bargain that allows a single member to force a vote to oust him from the role. Any deal he negotiates with the White House or the Senate would require convincing that same group of right-wing House members.
Mccarthy’s critics say his deal with the right wing of his party weakened his position. But the speaker has defied those expectations in recent weeks, unifying Republicans to pass a bill to hike the debt ceiling by $1.5 trillion or for just one year — whichever comes first — while also capping future spending at 1% annual growth over the next decade. Such a bill would set up yet another fiscal showdown months before the 2024 presidential election.
The legislation, which would cut future deficits by $4.5 trillion, also takes aim at Democratic priorities. The bill would add new work requirements for Medicaid recipients and others who receive federal assistance, end Biden’s student loan debt forgiveness program, claw back unspent COVID-19 funds and repeal parts of the White House climate agenda. Though the bill has no chance of passing a Democratic-controlled Senate or securing Biden’s signature, it strengthens Mccarthy’s hand as he looks to hash out a deal with a so-far uncompromising White House.
But so far Mccarthy’s methods have failed to move Biden, whose own budget proposes reducing the deficit by $3 trillion over the next decade by increasing taxes on the wealthy and corporations and allowing the government to negotiate drug prices in order to reduce health care spending.
Mccarthy is an “honest man” who “just about sold away everything (to the) far, far right,” Biden told MSNBC in an interview Friday.
“There’s the Republican Party and there’s the MAGA Republicans,” the president said, referring to former President Donald Trump’s Make America Great Again political movement. “And the MAGA Republicans really have put him in a position where in order to stay speaker, he has to agree — he’s agreed to things that maybe he believes, but are just extreme.”
The president has used the debit-limit fight to sharpen his campaign rhetoric, painting Republican cuts as damaging to the American middle class. The White House has circulated several memos arguing that the GOP bill would slash Republican priorities including policing, anti-drug trafficking efforts and veterans services.
Before Biden sat down with congressional leaders, the White House had already announced he would travel to a Hudson River Valley congressional district Wednesday to give a speech on how the GOP bill would include cuts to veterans’ health care visits, school staffing and a food program for homebound seniors. The New York district, which Biden won in 2020, is home to Rep. Mike Lawler, a vulnerable Republican who will likely have to win reelection if the GOP is to have any hope of expanding its five-seat majority in the House next year.
Instead of focusing his attention on Mccarthy, Biden has leaned on Mcconnell, whom he cut deals with during the 2013 fiscal cliff crisis, the debt-ceiling standoff in 2011 and Bush tax cut fight in 2010. But Mcconnell insists he’s sitting this one out.
Rohit Kumar, Mcconnell’s chief negotiator during the 2011 debt talks, said the minority leader made the calculus that intervening would not yield the same response in the House as a Biden-mccarthy deal.
“If he thought that a deal that he would strike with President Biden would have a reasonable chance of becoming law then he might be more willing to step into that role,” said Kumar, now Pwc’s national tax services co-leader.
Much of Biden’s thinking is shaped by the 2011 debt crisis, when he served as Barack Obama’s vice president and the administration agreed to deep cuts that avoided a default but ultimately led to a downgrade of the nation’s credit rating for the first time.
A short-term extension of the debt limit, which would punt the deadline to raise the federal borrowing cap to align with annual talks over government funding — which will run out Sept. 30 — was initially floated, but both Mccarthy and the White House dismissed the idea Tuesday.
“A short-term extension is not our plan either,” White House Press Secretary Karine Jean-pierre told reporters. “This can be easily resolved. This is a man-made crisis that the speaker is leading.”