There’s no final debt ceiling deal, but already, lawmakers don’t like it
There’s still no deal in place for Congress and the White House to avoid a catastrophic default on the nation’s debt. But even as talks continued going into the weekend, one thing was already clear: A lot of Republicans and Democrats don’t like the deal, whatever it is.
On the right, the House Freedom Caucus has called for an end to negotiations over the debt ceiling entirely, saying “there should be no further discussion” until the Senate acts on a House bill that would raise the borrowing limit while sharply cutting federal spending. On the left, a growing coalition of Senate Democrats are calling for Biden to prepare to invoke the 14th Amendment, pushing for a unilateral — but potentially risky — move that would sidestep the close circle of negotiators trying to hammer out a compromise. House Democrats are trying their own long-shot bid to raise the debt ceiling without spending cuts, circulating a petition that could force a vote.
In the middle, negotiations broke down for much of the day on Friday, before resuming later in the evening. With the clock ticking toward a possible June 1 deadline, there was still much ground to cover going into the weekend.
If President Biden and House Speaker Kevin McCarthy (R-Calif.) do manage to reach a compromise, leaders in both chambers of Congress will then have to keep enough of their members on board to pass a deal before the government runs out of money. That could center negotiations on issues most palatable to moderates, alienating more staunch conservatives and liberals who might not vote for the final bill. Even if the most conservative and most liberal members of both chambers oppose legislation enacting a deal, it could still easily pass if other lawmakers back it.
There were signs this week that congressional leaders were already preparing for such an outcome. In a statement Thursday, Senate Majority Leader Charles E. Schumer (D-N.Y.) offered a simple word of caution: “No one will get everything they want.”
Last month, the House approved its GOP-backed bill to raise the debt ceiling while also slashing federal spending and repealing many of Biden’s moves on climate change and student debt.
But those proposals were a total nonstarter for the Biden administration and congressional Democrats, who argue that the “Limit, Save, Grow Act” amounts to economic hostage-taking, turning the looming debt ceiling deadline into political dynamite.
With dwindling time, McCarthy and the White House are trying to find common ground. In a show of urgency, Biden cut short a foreign trip to return to Washington on Sunday, straight from the G-7 summit in Japan. McCarthy has said he hopes to have a vote next week in the House, suggesting a deal would have to come together in a matter of days.
There’s plenty of ground to make up in the meantime. Conservatives are angling for major spending cuts, as well as a clawback of unspent covid aid funds. Republicans are also pushing for changes to the permitting process for energy projects, with the goal of helping fossil fuel projects.
This week, McCarthy said the inclusion of work requirements for some social programs was a “red line” that Republicans had to have, though few specifics have emerged.
Several people close to the process also said lawmakers remained divided over the extent and time frame of new restrictions on federal spending. Democrats want spending caps to last roughly two years, after which appropriators could spend more again. But Republicans have sought to extend the duration of the restrictions to as long as a decade.
Meanwhile, a growing coalition of liberal lawmakers have come out strongly against work requirements, arguing federal food assistance programs or Medicaid are the wrong places to try to cut a deal. Democrats are also pushing for permitting reform, but their priorities revolve around building new transmission lines for cleanenergy projects that got money from last year’s Inflation Reduction Act.
White House officials have also floated roughly a dozen tax plans that would cut the deficit as part of a broader budget agreement, including a measure aimed at cryptocurrency transactions and another for large real estate investors. But those overtures were turned down by GOP aides.
Rep. Ralph Norman (R-S.C.), another Freedom Caucus member, told The Washington Post that “time is up.” Further delay would make it even more likely that a final agreement is a no-go for his conservative colleagues, he said.
Meanwhile, House Democrats this week started collecting signatures for a discharge petition to act on legislation that would raise the debt ceiling without other policy changes. The long-shot approach is meant to bypass House Republicans, and was endorsed Wednesday by House Minority Leader Hakeem Jeffries (D-N.Y.).