President Joe Biden wants to campaign for reelection, but he’ll have to survive the debt ceiling showdown first.
The same day Biden announced for 2024, the Congressional Budget Office released its score for the Republican-led Limit, Save, Grow Act, unleashing a war of words from both political parties.
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The act would save $4.8 trillion through fiscal 2023, according to the CBO, with $545 billion of that coming through interest payment savings alone.
“The House deserves credit for putting forward a reasonable proposal that would help the Federal Reserve fight inflation in the near term and generate significant savings at a time when they’re desperately needed,” reads an analysis from the nonpartisan Committee for a Responsible Federal Budget. “Additional changes would be needed to hold debt to manageable levels, including by addressing rising health care costs and trust fund solvency. We suggest including a fiscal commission to deal with the long-term drivers of the debt.”
While the analysis also calls for raising the debt ceiling as quickly as possible, the act itself got a much different reception from the Biden White House.
Dubbing it the “Cut Growth Act,” White House communications director Ben LaBolt excoriated the bill.
“Speaker McCarthy has cut a deal with the most extreme MAGA elements of his party to accelerate taking food assistance from hundreds of thousands of older Americans and to carve out one industry from his draconian cuts without making a single change to provisions that will strip away healthcare services for veterans, cut access to Meals on Wheels, eliminate healthcare coverage for millions of Americans, and ship manufacturing jobs overseas,” LaBolt said.
That was one of several statements the White House released Wednesday morning describing House Speaker Kevin McCarthy‘s (R-CA) proposal as extreme and damaging to the poor. On Tuesday, White House press secretary Karine Jean-Pierre called McCarthy’s plan cruel and dangerous. The House passed it later that day.
But despite the harsh rhetoric, Biden will need to come to a deal with McCarthy if either is to avoid economic disaster by defaulting on the nation’s debt this summer.
The White House insists it will not negotiate with House Republicans, saying a debt ceiling raise is the constitutional duty of Congress and pointing out that the House did so three times under then-President Donald Trump.
McCarthy met with Biden in January to begin negotiations on the debt ceiling, but that meeting ended without a binding agreement because the White House maintained it would not discuss federal spending until the borrowing limit was lifted. McCarthy said he has not spoken with Biden since that initial meeting, accusing the president of “bumbling his way into the first default in our nation’s history.”
The showdown is reminiscent of one between then-President Barack Obama and a GOP-led House 10 years ago, which didn’t lead to default but did cause a historic downgrade of American debt. Neither side will want to see a repeat of that scenario, particularly as Biden rolls out a campaign slogan promising to “finish the job” he started.
Polling shows that a sizable number of voters say they do not want the debt ceiling raised, including 54% of respondents in a recent CBS News-YouGov poll. Even when told that not raising the ceiling would cause the United States to default, 30% still said they don’t want it raised.
For now, both sides of the debate are pointing fingers at the other as being at fault for the impasse.
“Joe Biden wants a conflict on the debt ceiling, but I have news for him and his party—you played yourselves,” tweeted Rep. Byron Donalds (R-FL). “Republicans have a plan for the American people, and the Democrats look ridiculous for refusing to negotiate.Play stupid games, win stupid prizes.”
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Biden himself was asked about negotiations during Wednesday’s press conference with the president of South Korea and pointed right back.
“I’m happy to meet with McCarthy but not on whether or not the debt limit gets extended. That’s not negotiable,” he answered. “I notice they quote Reagan all the time and they quote Trump, both of which said — I’m paraphrasing — it would be an absolute crime to not extend the debt limit.”
