Debt anxiety falls a little on the Hill. It might not be enough.
President Joe Biden and Speaker Kevin McCarthy are still very much in the finger-pointing stage of the economy-rattling debt crisis. Yet some possible signs of life have begun to emerge.
Senior Hill aides have agreed to start more in-depth talks on government spending — though Democrats insist those are on a separate track from raising the nation’s debt limit. Biden has said he’d take a “hard look” at unspent Covid aid money in the talks. A top White House adviser is laying out ideas for energy permitting reform — one of the GOP’s biggest debt limit priorities.
It’s all far short of a compromise to bridge the mile-wide gap between party leaders, who have retreated to their corners since their Oval Office sit-down on Tuesday. Top Democrats are still refusing to entertain the GOP’s spending cut demands, with Senate Majority Leader Chuck Schumer castigating McCarthy in a bid to split him from Senate Minority Leader Mitch McConnell. And Republicans are complaining that Biden is running out the clock.
So the minor signs of progress that are visible in the Capitol are leaving some lawmakers to wonder whether they’re meaningful or more of a mirage as the deadline to avoid a full-blown economic crisis draws nearer.
“[Democrats] are negotiating right now,” said Rep. Mike Garcia (R-Calif.), one of the GOP’s most vulnerable incumbents this cycle. “The question is, are they negotiating in good faith? Are they actually trying to solve this problem? Or are they trying to, like many issues and crises, weaponize it and use it against their opponents for political purposes?”
Rep. Dusty Johnson (R-S.D.) described White House adviser John Podesta’s open discussion on energy permitting as “remarkably quick movement to the Republican position.”
Democrats say they’re not actually talking tradeoffs for the debt, insisting that any fiscal conversations they’re having are strictly about spending bills for the fiscal year that starts Oct. 1. The existence of those talks at all, though — with Biden set to meet the Hill’s bipartisan leadership again on Friday — has calmed at least some of Congress’ rising anxiety.
“I feel slightly better, slightly, because they’re meeting again Friday. And because Mitch was so unequivocal: ‘We’ve not had a default and we’re not gonna have one,’” said Rep. Tim Kaine (D-Va.).
House Minority Leader Hakeem Jeffries (D-N.Y.) touted “positive conversations that are underway that will continue throughout the balance of the week,” adding that “I look forward to returning to the White House on Friday.”
Even so, Democrats are still plenty worried. Biden himself said after Tuesday’s meeting that he was “considering” something of a nuclear option in case he can’t reach a deal with Republicans: deploying the 14th amendment to invalidate the debt limit altogether. That suggestion infuriated Biden’s GOP counterparts; McConnell replied: “Unconstitutionally acting without Congress is also not an option.”
It’s partly McConnell’s stance — describing himself as in “solidarity” with McCarthy on Wednesday — that’s made House Republicans so confident in their posturing against Biden.
McCarthy himself stressed that GOP unity in a closed door meeting Wednesday as he laid out details of the previous day’s White House encounter to his members.
The speaker and his team also presented GOP polling about the ongoing debt fight, arguing that voters were on their side in thinking that Congress should find federal spending cuts, particularly given stubborn inflation, according to two people in the room.
Across the Capitol, Senate Republicans reviewed polling last week that similarly made them feel strong in their position, said Sen. Joni Ernst (R-Iowa).
“People understand common sense. We need to return to fiscal sanity,” Rep. Chip Roy (R-Texas) said of the polling data.
But illustrating just how far apart the two sides remain, the ultraconservative Roy accused Biden of “burying his head in the sand” on the issue, adding: “The president doesn’t give a rat’s rear end about the American people.”
The right flank’s hardline position is just one of many reasons that a final compromise will be so difficult to get through Congress. Conservatives have said they’re unwilling to accept anything less than the GOP’s conservative-leaning debt deal last month.
And progressives are challenging the paradigm that the only discussions on the table should be about energy production and cutting spending.
In an interview, Sen. Elizabeth Warren (D-Mass.) said that she wanted to remind Republicans that if “they’re serious about reducing the national debt, part of that conversation should be about making billionaires and billionaire corporations pay more to help support our nation.”
There’s also a question in both parties about how to judge when one side has blinked: If Democrats are negotiating on spending at the same time as Congress considers the debt ceiling, have they wobbled? Or is it Republicans who are watering down their position by considering something less than the blunt spending cuts and repeal of Democratic policies that underpin their debt bill?
Those questions have the Capitol’s dealmakers antsy — and prepared for anything.
“I prefer [a] clean” debt ceiling increase, said Rep. Henry Cuellar (D-Texas.). “But at the end of the day, we probably have to sit down and work something out.”
Nicholas Wu contributed to this report.