Negotiating on the debt limit

Looking back on the first two years of Joe Biden’s presidency, Tim Kaine has one big regret about a largely successful stretch of Democratic rule: That his party didn’t try to raise the debt ceiling on its own last year.

The Virginia senator believes that if Democrats had tried to hike the debt limit before the House GOP swept into a majority, even Sen. Joe Manchin (D-W.Va.) might have gone along with it. But Biden’s party never moved on the issue. And six months later, Democrats are stuck doing exactly what they said they wouldn’t — negotiating on the debt ceiling with Republicans.

“If I could do one thing different,” Kaine lamented this week, it would have been a late-2022 debt hike. “And I was saying it at the time … ‘hey, we got the votes.’”

As Speaker Kevin McCarthy and President Joe Biden labor to overcome huge ideological disputes over spending and work requirements in order to strike a budget deal that might unlock a debt-limit increase, Democrats are bemoaning what might have been. Many progressives are at a loss over how the party ended up here, having slowly reversed a stance that they wouldn’t haggle with the GOP over the debt limit, after deciding not to even attempt a party-line debt hike last year.

The frustration is evident in the rising number of congressional Democrats who are urging Biden to use the legally questionable path of the Constitution’s 14th Amendment to try a debt hike, rather than concede to McCarthy. The Democratic leeriness is acute enough to raise the possibility of a liberal revolt when a bill comes to the House and Senate floor.

“Why are we negotiating?” fumed Rep. Jamaal Bowman (D-N.Y.), urging Biden to pull out of the talks entirely. “It’s just very frustrating that we have backed ourselves into this corner.”

Shortly after McCarthy took the speakership, Manchin began asking for him to negotiate directly with Biden. But congressional Democratic leaders and Biden resisted, saying they would accept only a standalone clean debt ceiling, particularly until Republicans passed a bill to establish a negotiating position. Then, to the surprise of many, McCarthy did just that.

And now the talks look just as the West Virginian wanted: Democrats’ “no negotiations” position on the debt ceiling vanished, replaced by a potential deal that could slash at least some federal spending, against their members’ wishes, and possibly give into further GOP demands.

After some signs of turbulence on Friday, both parties’ negotiating squads now plan to spend the weekend attempting to seal a deal that could install new budget caps, expand energy production, take back unused coronavirus aid and potentially enact new work requirements for government assistance.

Bowman is one of many progressives worried that the president’s talks with McCarthy will embolden the House GOP as it seeks big concessions. Democratic leaders have tried to steady the ship with linguistic jiu jitsu, asserting that the budget negotiation is separate from the debt ceiling — which means the party has not backslid on its no-negotiations position.

Senate Majority Leader Chuck Schumer this week called the negotiations on the budget and raising the debt ceiling “separate but simultaneous.” It was a bit different than how he sounded in February: vowing that “we’re going to win this fight, and it’s going to be a clean debt ceiling.”

So, are Democrats negotiating on the debt limit? “The president is,” replied Sen. Angus King (I-Maine), who caucuses with the party.

“My short answer is, no. Because negotiating the debt ceiling means saying, ‘maybe we should consider default,’” said Sen. Chris Coons (D-Del.), a close ally of Biden’s.

Still, Coons conceded that a budget agreement and a debt hike “need to move at the same time.”

Is he comfortable with that? “I’m comfortable with avoiding default.”

It’s always possible that the McCarthy-Biden talks stall again or break down entirely, leading to a more real consideration of a standalone clean debt ceiling increase or unilateral White House action as Washington careens toward the brink. But that sort of implosion would risk McCarthy’s job, not to mention that Biden and many of his allies seem eager to end the drama and move away from risking a recession that could hamper his reelection bid.

Even if that means cutting a deal with the GOP and undergoing a painful intraparty fight.

“The negotiations started when we lost the House,” said moderate Rep. Lou Correa (D-Calif.).

Manchin, Sen. Kyrsten Sinema (I-Ariz.) and many dealmaking Democrats insist they’ve always known Biden would be forced into a negotiation with Republicans. That’s in part because it’s harder for Schumer and House Minority Leader Hakeem Jeffries (D-N.Y.) to be seen as bending than it is for Biden, who’s used to getting liberal grief over his appetite for compromise.

“Leaders of caucuses have to represent their caucus. whereas the president is thinking about, rightfully, ‘how do we protect the full faith and [credit of] the United States of America?’” Sinema said.

Biden is “thinking about it from a more macro perspective than either of the leaders are, which is his job,” she added. “And I’m not saying the leaders aren’t doing it right. I’m just saying that he has to have a different role.”

In the narrowly divided House, centrist Democrats believe a deal can pass their tightly divided chamber if moderates in both parties are willing to carry it. That means a debt and budget deal could alienate the left and right, essentially by design, while still getting a House majority and supermajority in the Senate.

“The far left is not gonna be happy and the far right isn’t gonna be happy,” predicted Rep. Henry Cuellar (D-Texas). “If Biden and Hakeem are OK, then I’m OK.”

But House progressives — who make up a bloc of roughly 100 members — insist it’s too risky to rely on McCarthy to deliver the votes on the cusp of a default. And they refuse to be taken for granted.

“It’d be enormously foolish to assume that even if you cut some dirty deal with Kevin McCarthy, that he delivers a whole bunch of Republican votes,” said Rep. Jared Huffman (D-Calif.).

Huffman added that Biden and Democratic leaders shouldn’t count on the Progressive Caucus to bail them out if they need liberal votes: “I don’t think we would.”

Progressive leaders were the ones most vocally calling for Democrats to tackle the debt crisis early last fall, when they had the power to do it on their own. The group’s leader, Rep. Pramila Jayapal (D-Wash.), privately raised the issue in the waning days of 2022 with then-Speaker Nancy Pelosi, according to a person familiar with the discussion.

That would have required using an arduous budget maneuver to avoid the Senate’s 60-vote threshold, however, and top Democrats say they weren’t even close to deciding on that. Many Democrats wanted to try it, but ultimately the party shelved the idea due to Manchin’s reluctance as well as the cumbersome logistics it would entail. Plus, it was the holidays.

So, would Manchin have gone for a Democratic-only debt hike late last year? “You’re speculating about all this hypothetical shit,” he replied.

“It always needs to be bipartisan,” he said. “But when you can’t get a bipartisan [deal] or have any type of agreement at all? You’ve got to raise the debt ceiling.”

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