By Jonathan Bernstein / Bloomberg Opinion
The odd thing about the debt limit negotiations is that it isn’t hard to imagine a compromise on the big issues separating the two parties.
As part of a deal to raise the borrowing limit, Democrats could offer to accept some Republican cuts in federal spending, coupled with a few other GOP priorities such as changes to the permitting process for energy projects and a deal to rescind unspent covid relief funds. Republicans wouldn’t get all they want; spending would be trimmed, not slashed, and the big Democratic legislative achievement passed last year, the health-and-climate measure officially known as the Inflation Reduction Act, wouldn’t be repealed.
If the contours of a deal are obvious to most of us, why can’t the two sides get there?
The primary problem remains the pernicious politics of the House GOP caucus. Some 50 or so of the most extreme House Republicans are almost certain to oppose any deal that President Joe Biden would sign on to. House Speaker Kevin McCarthy barely managed to keep them on board for the partisan messaging bill passed last week that gave far-right members a lot of things they wanted (most of which would never be tolerated by Democrats). And since many mainstream conservatives in the House are reluctant to allow any room between themselves and the extremists, it will be hard to get as many as half the party on board with a compromise, so any deal will fall short in the House.
Then there are McCarthy’s own troubles. Even if he is able to deliver the votes on a debt ceiling compromise, House Republicans who oppose any agreement could launch an attempt to dump him as speaker. If that happens, it would only take a handful of Republicans to prevent McCarthy from securing the House majority that he needs to hold on to his job, unless Democrats supply votes to save him. With that threat looming, it’s no wonder McCarthy would be reluctant to make a deal with Democrats.
If it was just a question of reaching a bipartisan agreement, Senate Republicans and Democrats could probably get it done, and we would be looking to Senate Minority Leader Mitch McConnell for positive signals. But McConnell isn’t going to broker a deal that the House might defeat; or that McCarthy might not even bring to a vote.
Another hurdle to a debt ceiling deal is that President Biden quite reasonably has insisted that the borrowing cap be dealt with separately from policy and budget negotiations. Democrats have had every right to object to House Republicans holding the U.S. economy hostage in order to extract policy concessions. But as the window for resolving the crisis narrows, Biden has signaled that he would accept a “separate paths” approach, in which policy negotiations proceed and everyone — or at least the Democrats — pretend that the debt limit increase was passed at the same time as a policy deal, yet wasn’t linked to it. The good news is that the two sides met on Tuesday; their staffs are continuing to talk; and the principals have agreed to meet again today.
Meanwhile, both Biden and McCarthy are trying to spin the narrative to their advantage, accusing the other side of being unreasonable. We don’t know where their real bottom lines are.
The one thing that could solve McCarthy’s immediate problems would be if Biden were to take unilateral action on the debt ceiling by invoking the 14th Amendment or one of the other unorthodox solutions being discussed in policy circles. Doing so would spare McCarthy the need to negotiate with the White House over anything until fall, when Congress needs to work out annual spending bills.
The U.S. is perhaps three weeks away from defaulting on its debt, a once-unfathomable event that would cause economic calamity. McCarthy said after his meeting with Biden that the House wouldn’t consider adopting a short-term debt limit extension to forestall imminent disaster. But that could just be bluster. An agreement, while still improbable, can’t be ruled out.
It’s likely Biden will take unilateral action if that’s the only way to prevent a default. But it’s hard to know for sure. Biden’s lawyers might have convinced him that unilateral action isn’t legally feasible. Or his economists might have convinced him that the markets would view such a maneuver as damaging as an actual default. In which case, our only hope is that the speaker and other House Republicans are willing to accept a little political risk in order to accept a deal, instead of shorting out the economy to buy a little job comfort.
Jonathan Bernstein is a Bloomberg Opinion columnist covering politics and policy. A former professor of political science at the University of Texas at San Antonio and DePauw University, he wrote A Plain Blog About Politics.
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