The emerging and potentially catastrophic stalemate concerns the maximum amount that the U.S. government can borrow to pay its existing bills. Congress must act to raise or suspend that cap, known as the debt limit, or risk pushing the United States into a recession with global implications, according to leading economists and administration officials.
The country’s debt — now exceeding $31 trillion — is the result of decades of spending enacted by lawmakers in both parties. But Republicans, who assumed control of the House this month, have tried to pin the blame entirely on Democrats as they pledge to seek new, steep reductions in federal spending this year.
“You can’t just increase the debt limit and let President Biden keep spending like he’s done,” House Majority Leader Steve Scalise (R-La.) said Sunday on Fox News.
Appearing on NBC’s “Meet the Press,” Rep. Nancy Mace (R-S.C.) said Republicans had to seize on the debt ceiling because “clearly the budget process isn’t working.”
“There’s no time like the present, because we have the debt ceiling looming over us, to talk about this,” she said.
Even Sen. Joe Manchin III of West Virginia, a key member of Biden’s party, signaled interest in holding spending talks. In a potential break with other Democrats, the pivotal centrist told CNN it would be a “mistake” if the president did not discuss some cuts with his GOP counterparts — particularly focusing on eliminating waste, fraud and abuse.
The quarreling sets the stage for a high-stakes political battle in the coming months, when the United States is expected to exhaust all of its remaining special budgetary moves to prevent a government default. In a letter to lawmakers last week, Treasury Secretary Janet L. Yellen said these “extraordinary measures” could sustain federal finances until at least early June, a timeline that prompted congressional Democrats to sound their own urgent notes for action Sunday.
“We shouldn’t play games with the national debt,” Sen. Richard J. Durbin (D-Ill.) said on CNN’s “State of the Union,” adding that Biden should “absolutely not” negotiate with Republicans.
The U.S. government has never defaulted in its history — and even the mere prospect of a default has cost the economy greatly. A similar showdown between Republican lawmakers and a Democratic-led White House in 2011 rattled markets, worsened the country’s credit and cost taxpayers more than $1 billion. The brinkmanship ended only after President Barack Obama worked out a deal with GOP lawmakers that capped spending for a decade, leading to what Democrats have long described as crippling shortfalls at federal health, science, education and labor agencies.
This year, Republicans are seeking a similar deal under McCarthy — yet Democrats have remained steadfast in their refusal to accept GOP demands. On Friday, the White House confirmed that Biden plans for now to sit down with the House speaker to discuss “a range of issues,” including the looming spending fight. But press secretary Karine Jean-Pierre also stressed in a statement that “raising the debt ceiling is not a negotiation,” citing the prospect of “economic chaos” if Republicans look to levy the upcoming fiscal deadline for political gain.
Biden, for his part, recently has emphasized Republicans’ contributions to the country’s debt. Speaking Friday at the White House, the president said that about a quarter of U.S. debt over the past 200 years came “in the four years of my predecessor,” referring to former president Donald Trump. And other Democrats have pointed to the fact that they provided their votes — without demands — to raise the debt ceiling during the Trump administration.
A top moderate Republican, Rep. Brian Fitzpatrick (R-Pa.), said earlier Sunday on another Fox broadcast that it would be a “problem” if Biden did not engage Republicans in an era of divided government. A co-chair of the bipartisan Problem Solvers Caucus, Fitzpatrick said he is working on legislation to try to address the logjam. He was joined by Rep. Josh Gottheimer (N.J.), a moderate Democrat, and said the two want to put “meat on those bones” of that proposal.
Fitzpatrick said the still-forming bill would change the debt ceiling from a “numerical dollar amount” to a measure of debt as a percentage of gross domestic product. If that percentage exceeds a certain threshold, a “cure period” would begin, the congressman said, noting that “if that cure does not happen, certain budgetary reforms automatically kick in.”
“Nobody should be taking the position that we should not negotiate,” Fitzpatrick said.