President Joe Biden met with Speaker Kevin McCarthy and other congressional leaders at the White House Tuesday and Biden reiterated that he wants the debt ceiling — which is expected to be breached as early as June 1 — raised without any preconditions. He will not, he’s said all year, negotiate over this matter.
And yet, after the meeting, he also said that he’s “prepared to begin a separate discussion about my budget and spending priorities.” That discussion, he said, would start among staff that same day, and continue daily before another White House meeting with congressional leaders Friday. But, he added, he would not have that discussion “under threat of default,” saying the possibility of a debt ceiling breach must be taken “off the table.”
All that is a bit difficult to parse. The main takeaway, though, appears to be that talks over spending levels — the talks Republicans wanted — are beginning. Biden may say he’s technically not negotiating over the debt ceiling, but he is negotiating before the GOP has released that hostage.
That’s because the president’s “no negotiations” stance was looking increasingly untenable. So far, this showdown has not played out how the president may have hoped.
Think back to the chaos of January 2023, when McCarthy spent days trying to line up the votes to become speaker in a closely divided House. The debt limit was obviously looming, and it seemed that the House GOP, hopelessly divided between extremists and their few moderates, could well fail to agree on any plan, and McCarthy would not be able to whip them into line.
One possibility then was that when the deadline drew nearer, outside business groups and public opinion would pressure Republicans to act — and eventually, to avoid economic calamity, moderate Republicans would break from the hardliners in their party and vote to raise the debt ceiling (perhaps using an unusual procedural tactic, the discharge petition, to force a House vote).
The problem for Biden is that this isn’t what’s happened.
Instead, the House GOP united around one plan that they passed through the House — a plan Democrats find absurdly extreme, but that could nonetheless be interpreted as an opening bid for talks. That’s exactly how House Republicans have framed it. “Had the president agreed to negotiate in good faith, we’d already be done,” McCarthy said last month.
Meanwhile, moderates and business groups were exerting pressure on Biden to talk with McCarthy. In both the House and the Senate, GOP moderates were in lockstep urging Biden to engage, and Democratic moderates like Rep. Jared Golden (ME) and Sen. Joe Manchin (WV) were singing the same tune.
The result is that it’s Biden who looked increasingly out on a limb. But that may not be for long. Now that spending talks are beginning, attention will likely shift to whether Republicans can actually manage to agree to a reasonable deal.
What are Biden’s options?
Let’s be real: The debt ceiling is terrible policy and this is an awful way to run a country.
Still, it needs to get raised, or else the economic damage could be very serious. So what are Biden’s realistic options at this point?
One is to use executive action to raise the debt ceiling somehow, rather than waiting for Congress to do it. Since 2011, many outside commentators and academics have brainstormed such options. But the administration sees various practical, legal, and political drawbacks that have made them very reluctant to use these tools. Maybe if their backs are really against the wall they’d try one, but clearly they’re not prepared to do that yet.
A second option is to simply stick to the “no negotiations” position right up to the deadline and bet Republicans will blink. But this option is obviously quite risky. It’s House Republicans, after all — they may well not blink. And if Biden is seen as forcing the crisis by being uncompromising, he may end up getting the blame for financial disaster.
So the third option is to start talks. Whether Biden admits he’s doing that or whether he has some sort of justification that he’s “only” negotiating on spending and not the debt ceiling, the goal would be the same: to work to see if Republicans will really get to a deal Democrats can live with.
Now, it’s quite possible that, all along, Biden’s stance that he will not negotiate was itself a negotiating position, and that the White House knows full well they’ll have to talk eventually. But many liberal commentators have now adopted it as a matter of principle — which could make Biden climbing down from it tricky to sell without looking like he’s caving.
The lessons of the 2011 debt ceiling crisis, explained by the negotiators who were there
To get a sense of what a climbdown might look like, read this carefully framed New York Times op-ed by former Obama White House adviser Dan Pfeiffer. At first glance, it’s filled with much praise for Biden’s “refusal to negotiate on the debt ceiling” as the “best strategy” and extensive criticism of GOP extremism.
But further down, Pfeiffer admits that Biden needs to “make sure the debt limit is extended” and that “to get that, he will need to work with Mr. McCarthy to find a framework for fiscal negotiations.” In other words: He needs to negotiate!
That certainly doesn’t mean Biden should cut any deal or give in to any demand. Negotiation is a two-way street and Republicans will have to move a great deal from their current position to get Biden’s assent. If they refuse to do so, he should keep his other options in play.
But first he needs to try for a deal.
The real Democratic objection is not about the principle of debt ceiling talks
Biden’s “no negotiations” position was an understandable response to the last time an emboldened new GOP House majority sought spending cuts from a Democratic president: in 2011, under President Obama. That year, a hardline House GOP brought the nation to the brink of defaulting on its debt.
Democrats view that crisis, and the resulting concessions made by Obama, as a disaster that should never be repeated. They view the House GOP as extreme and McCarthy as unreliable. So they’ve decided to argue that it should be a matter of principle not to negotiate with hostage-takers.
But historically, it hasn’t been the case that the debt ceiling is a sacrosanct thing that shouldn’t be subject to typical political horse-trading. In 2017, Democratic Senate leader Chuck Schumer bragged to the New York Times that he had used the debt ceiling as “leverage” over President Trump.
The other odd thing about all this posturing is that Democrats are all aware they will have to negotiate with McCarthy on government spending levels later this year (by September 30, to avoid a government shutdown). So Democrats already know they will have to negotiate on the topic of McCarthy’s choice. They don’t want to do it with the debt ceiling deadline hanging over their head, which is, again, understandable.
So the real Democratic objection is not over the principle of debt ceiling talks, or about the inevitability of government spending talks. It’s about the fear that, with the debt ceiling in play, Republicans will make demands that are untethered from reality, rather than seeking a realistic deal.
Why the debt ceiling problem never goes away
That is a very reasonable fear. But Biden hasn’t yet proved that Republicans are too extreme to agree to a realistic deal because he hasn’t even started talking to them. Prior to yesterday, it was the president who was taking the uncompromising position, while Republicans are arguing that they are happy to talk. (The current House GOP bill is certainly unacceptable to Democrats, but that’s no surprise if we view it as the opening bid in a negotiation.)
To be clear: It’s entirely possible Democrats are right about the House GOP and that they won’t agree to any plausible deal on the debt ceiling and budget. And if so — if Republicans really won’t budge enough — it will be important to explore some of Biden’s other options again.
But moderate Republicans are more likely to blink if it’s been demonstrated to them that their colleagues further to the right are completely ungovernable. And a risky and dubious executive authority option might in the end look like the least bad option compared to what the GOP is willing to concede.
To truly feel comfortable making that call, though, Biden has to engage in those talks and try to get a sense of the GOP bottom line.