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When Joe Biden and congressional leadership scheduled a big meeting this week to talk about the debt ceiling, there was only one person I wanted to talk with about it: Jordan Weissmann, over at Semafor. The last time we talked to Weissmann it was January. Now, just like then, Republicans are refusing to raise the debt limit without an agreement to slash spending.
The only thing that’s changed here is that the country has inched closer to the brink of insolvency. Weissmann says you can think of these new negotiations as akin to what happens around closing time at your local bar. Even if you’ve spent all night avoiding that person a few seats down, when the clock is ticking, priorities change.
“McCarthy’s thing is that it’s been months and months and months that he’s been offering to talk to Biden about the debt ceiling and Biden’s been turning him down. It’s 3:30 a.m. at the bar, and Biden’s thinking of finally buying Kevin a drink. We’re at that stage of negotiations,” Weissmann said.
Looking at video footage of this meeting and the press conferences afterward, the president and the speaker of the House seemed to have had a pretty awkward date. Republicans and Democrats emerged separately. And Speaker Kevin McCarthy seemed aggrieved.
“My take is a little bit more optimistic,” Weissmann said. “If you listened really carefully to what they were saying afterwards, you could kind of see how maybe there is almost a possibility of a deal shaping up that’s similar to what some people in Washington have been talking about. I don’t think we’re at the all-is-lost stage.”
But Washington doesn’t have a lot of time left to solve this problem. “Janet Yellen has said that the default date could be as soon as June 1. Three weeks to potential Armageddon isn’t a lot of time, admittedly.”
On Thursday’s episode of What Next, I spoke with Weissmann about where all this debt ceiling gamesmanship is headed. Our conversation has been condensed and edited for clarity.
Mary Harris: We’ve talked before about how the debt limit is this silly anachronistic thing. No other country does exactly what we do—make their legislature vote on whether they’re going to borrow money that they’ve already agreed to spend. Nevertheless, here we are. To raise the debt ceiling, we need both the House and the Senate to agree on how to do that, and the White House, too, because Biden would need to sign whatever legislation they pass. But the House is controlled by Republicans; the Senate is controlled by Democrats. Hence, we’re at this impasse. Let’s go back a little bit because going into negotiations this week, the Republicans, or at least House Speaker Kevin McCarthy, did have a plan they were working off of, right? Can you tell me about the bill that passed the House a few weeks back?
Jordan Weissmann: Sure thing. At the beginning of all of this, the question was: Could Republicans actually even pass their own debt ceiling bill?
Like, can they agree among themselves?
Right. The Republicans are a notoriously fractious group, and they have a very small majority, which gives them very little room for error and little room for Kevin McCarthy to navigate. Any five people can veto a bill if it’s going to be party line on their side. And anybody can basically call for McCarthy to be ejected from the speakership at any moment, so that makes things a little tricky, too.
Kevin McCarthy started bringing people into his office one-by-one, is my understanding.
He’s trying to whip up as much support as he can. And so there was this question: Could Republicans actually agree amongst themselves on raising the debt ceiling? Many of them had never, ever, ever voted to raise the debt ceiling under any circumstances. There were about 16 of them who had never done it before. And so they started crafting this bill. What came out of it was a Republican wish list. After a lot of haggling, you got this piece of legislation that would basically repeal all of the important parts of Biden’s signature climate legislation, the Inflation Reduction Act.
It takes a sledge hammer to Biden’s agenda.
It junks all the subsidies for green energy and other such things from that bill. It would also slash a lot of the federal budget—discretionary spending, things like education, veterans services. It would have put tougher work requirements on food stamps and Medicaid. It was this catalog of conservative policy goals. There’s just absolutely no way this thing would ever pass the Senate, which is still controlled by Democrats, and no way President Biden would ever sign this. He’s not going to repeal his signature climate achievement after being held at gunpoint over the debt ceiling.
If it’s never going to pass the Senate and Biden’s not going to really ever go for it, what’s this thing doing and for whom?
What it showed was that Republicans could pass something. And here’s why that was important: If Kevin McCarthy could not have passed a bill on a party-line vote, it would have proven that he needed to get Democrats to sign on. And he basically would have had to stop this whole fight. Biden would be sitting there, saying, “Why am I supposed to negotiate with you? You can’t get your own party to vote for this.” He now can, at least with a semi-straight face, say, “Hey, I did my part. Now let’s talk and negotiate.”
I guess, but even this bill only raised the debt ceiling for a few months. So, is it actually a win?
Look, I kind of agree with you. I do think it’s a bit of a silly game here that Kevin McCarthy basically gets credit for passing the absolute bare minimum. The reality is that any deal that passes and actually has a chance of really being enacted here is going to require some amount of Democratic support. And that complicates things because we don’t know how many Republicans will fall off the bill once McCarthy starts making concessions and how many Republicans McCarthy is willing to lose. It’s a big question mark. We don’t know at what point he starts fearing for his own speakership. We don’t know if someone tries to challenge his speakership, if Democrats will come in to save him. There are a lot of known unknowns here.
That brings us to the White House meeting this week. The staff agreed to keep meeting. But can’t I 100 percent tell what they’re talking about, because Biden’s been clear: “I’m not going to negotiate over the debt ceiling.” And Mitch McConnell from the Senate has been like, “We’re not going to default.” Even Kevin McCarthy went to the New York Stock Exchange and said, “We’re not going to default.” So what is this negotiate like? What are they talking about? Do we know?
We’re starting to get an idea. So, there’s this interesting two-step going on. Basically what the Democrats—Joe Biden and Chuck Schumer—have said is that they are not willing to negotiate over the debt ceiling. As they’ve put it, they don’t want to negotiate with a gun to America’s head. They think that these are blackmail tactics, and they refuse to give in to them. However, they are willing to negotiate over the annual budget, because that’s something they do every year. And they’ve said this repeatedly. We are willing to negotiate over the budget, but we are not willing to negotiate over the debt ceiling.
What a lot of people looking at this have said is, OK, we need to find some sort of kabuki, or kayfabe, or whatever you want to call it, where the Democrats can say, “We are negotiating over the budget,” and Republicans can say, “We are negotiating over the debt ceiling,” and each side can pretend that they are winning. That’s really the solution a lot of people think we need.
So, what they said after the meeting is that their staffs are going to sit down and start talking about the annual budget and appropriations, and they are going to set the stage for Friday’s meeting, which will still be about the debt ceiling. But they are going to start talking about the budget. And so you can see the first movements in this two-step. Possibly.
At the same time, during their press conferences, they also namechecked a couple other areas of potential compromise. One thing that Republicans have asked for, and a lot of people have speculated Democrats would be OK with, is rescinding a lot of unused COVID aid money that may still be sitting around and hasn’t been spent yet.
This is a pretty small amount of money. It’s like $50 billion? It’s change for the government.
Right. Yeah, it’s not a lot, it hasn’t been spent. It’s not quite under the couch cushion, but it’s sitting in the piggy bank. Biden was asked about that during his press conference, and he was like, “We don’t need it all.” So, that’s something!
Another issue that has been talked about a lot, and is a subject of great speculation in Washington, is energy permitting reform. This is a huge priority for Republicans. They want to make it easier to do fossil fuel development in the United States. And they passed a bill that would do that. It’s a very partisan bill. It was a party-line bill in the House. But this is also an issue that has some appeal to Democrats. It has a lot of appeal to Joe Manchin, who introduced his own permitting reform bill last year. However, it also has some appeal to a certain class of climate activists, and especially renewable energy companies, because they want to make it easier to build transmission lines that can connect solar and wind to the grid. So, a lot of people think that there is room for compromise on this issue as well. And if you make it a slightly more conservative-leaning bill, that could be a big prize for Republicans. It’s actually not that hard to picture what a bipartisan deal would look like.
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It just looks nothing like what Kevin McCarthy passed a few weeks ago.
It looks nothing like what Kevin McCarthy passed initially. But the catch, again, is how do you negotiate it without Democrats having to admit they are negotiating over the debt limit or with Republicans not having to let go of the idea that they are negotiating over the debt limit. The central question in all this really isn’t so much what the specifics of a deal might look like, although that is obviously important and obviously contentious. But the real issue at the core of it is this philosophical question about whether or not the debt limit should be fair game, whether or not it should be OK to hold this thing hostage.