CNN
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House Speaker Kevin McCarthy will put his shaky control of the thin Republican majority on the line this week with a bid to pass a bill slashing spending that is designed to jam President Joe Biden over the looming government debt crisis.
The standoff is deepening between the Republican speaker and the Democratic president, which could be fateful for the country and both their political careers. And the ability of each side to unify their parties and shape public opinion to avoid – or dispense – blame will be crucial.
The clash is over the need to raise the government’s borrowing authority within months, without which the United States will default on its debts in a way that could send the domestic and global economies spiraling and could inflict deep pain and job losses on Americans. Republicans are seeking to use the situation as leverage to gut Biden’s domestic program.
The president, as he moves toward making his reelection campaign official as early as this week, says the GOP must not hold the nation hostage to what he says is an extreme agenda. The debt ceiling showdown is important to Biden as he seeks to protect the legislative achievements of his term so far and to portray an image of strength and purpose. He’s been building toward a reelection pitch partly by portraying House Republicans as the epitome of the chaos and disruption of ex-President Donald Trump, who is leading polls of the GOP primary.
McCarthy is seeking to unite his party around him to pass a bill that would raise the debt ceiling for a year in exchange for deep spending cuts. The measure would limit growth in government spending to 1% a year, block student loan forgiveness, rescind new funding for the Internal Revenue Service, introduce tougher work requirements for Medicaid, and repeal green energy tax credits in an effort to strangle Biden’s attempts to create a low-carbon economy to fight climate change.
A source involved in the effort told CNN’s Manu Raju Monday that the speaker’s whip team had been working all weekend to secure the 218 votes needed for passage and were confident they would win the critical vote later this week. But some stumbling blocks remain on details of the Medicaid and energy tax break issues.
Even if it makes it out of the House, the measure has no chance of defusing the situation or of winning the battle for the GOP since it won’t pass in the Democratic-led Senate. The approach is meant to make it look to the public like Biden is being obstructive and should hold the blame for any debt default.
The White House has said it won’t negotiate over a debt ceiling increase – which is Congress’ responsibility – and will only accept a clean proposal to raise the nation’s borrowing limit. The speaker, however, on Sunday was adamant that Biden would have to climb down from that position as the country races closer to a crisis that could peak sometime this summer.
“We will hold a vote this week, and we will pass it, and we will send it to the Senate,” McCarthy said on Fox, claiming Republicans were the only party in Washington with a responsible plan to raise the debt limit and criticizing Biden’s refusal to negotiate.
“He needs to show leadership and come to the negotiating table, instead of put us in default. This is risky, what he’s doing. He’s threatening the markets,” the California Republican asserted.
But the speaker left himself little political breathing room.
There remain huge questions over whether McCarthy, presiding over a tiny majority that’s beset by ideological divides, can unite his troops behind his effort. And if he can’t pass even this preliminary messaging bill, his authority will be in tatters.
Some Republicans are demanding spending cuts that would be politically impossible for Biden to agree to. Others may refuse to vote to raise the debt ceiling whatever happens. More moderate Republicans worry about the extreme factions of their party as they contemplate reelection bids. McCarthy, meanwhile, would likely pay with his job if he were forced to use Democratic votes to raise the debt ceiling – currently at over $31 trillion. This could set up a direct clash between McCarthy’s personal ambition and the national interest.
There are risks for Biden, too. A prolonged crisis caused by the failure to lift the debt ceiling and the potential of tumbling stock markets would leave him deeply vulnerable as he enters a reelection race.
Time is running out for President Biden and Speaker McCarthy to reach a debt ceiling deal and avoid an economic catastrophe
The speaker’s position ignores the fact that most Republicans had no problem raising the debt limit with no conditions when Trump was in the White House. It also doesn’t take into account the fact that the debt ceiling needs to be raised to pay for obligations already authorized by Congress – including under Republican presidents.
But if he is able to pass a bill, he could in theory build political pressure and increase jitters among some Democrats who fear the consequences of Biden being portrayed as the recalcitrant figure in the showdown – even if, at this point, the White House feels he has the moral high ground. The first signs emerged late last week of some skittishness among a few Democrats about a showdown that appears to be heading for a dangerous cliff edge.
Much will depend on how the president is able to frame the narrative around the standoff. The reality is that Democrats’ loss of the House last fall leaves the White House no choice but to negotiate with Republicans on spending and means Biden no longer has the freedom of being able to effectively dictate terms on the budget.
But at the same time, he wants to protect what he has already achieved – for instance, green energy legislation that was critical to establishing the US global role in fighting global warming. And if Republicans are able to use the debt ceiling to secure huge concessions, Biden will have cooperated in establishing a ruinous precedent. The GOP would no doubt seek to use exactly the same weapon to destroy his domestic agenda next year in the run-up to the election. And the prospect of endless brinkmanship over raising borrowing limits would severely damage the economy’s reputation as a financial haven and the stellar US credit rating.
The problem, however, is how the White House explains its stance to the public. Democrats are portraying McCarthy and the GOP conference as a radical tool of Trump’s “Make America Great Again” movement, which is willing to burn the country down for political gain. They are also sticking to the position that Biden is happy to talk spending with Republicans but only in relation to the budget process that controls future spending and not in relation to the debt ceiling, which needs to be raised to pay for existing obligations. This is a complicated distinction, however, that McCarthy is doing his best to blur even as leading Democrats hammered out the party line on Sunday.
“Let me put an idea out there. The proposal that McCarthy has put forward, that belongs in the budget,” Minnesota Democratic Sen. Amy Klobuchar said on CNN’s “State of the Union.”
“Our main goal right now is to make clear that we are going to avoid default. The last time when this was in the air, we literally went down in our credit rating back in 2011. What we will see, the repercussions of this are huge, if you go forward as McCarthy wants.”
Senate Majority Whip Dick Durbin also stressed that Biden was willing to talk – but only on the budget and not the debt ceiling.
“If we default on our national debt, it’s going to cost our economy dearly. We’re going to find businesses unable to proceed and people losing their jobs right and left. That is a terrible outcome. So let’s do the responsible thing and not default, move forward on the debt ceiling,” the Illinois Democrat said on NBC’s “Meet the Press.”
Durbin, like almost everyone on the Democratic and Republican sides, repeatedly stressed the danger of default. But at this point, it’s unclear how such a disastrous outcome can be avoided.
At the very least, it will take deft political management from both Biden and McCarthy – and would require trust between the two most powerful people in Washington that doesn’t seem to exist. The capital’s polarization and the political pressures on each man also make it hard to see room for a compromise that would satisfy both sides. And the crisis keeps on building, relentlessly, every day.
