Press "Enter" to skip to content

Why the White House is refusing to negotiate on the debt ceiling  

The White House is refusing to negotiate with Republicans on raising the debt ceiling, a risky position that Democrats think is a political winner, but that also reflects their scars from previous fights.

Taking the position that you won’t negotiate will allow Republicans to argue that a refusal by the White House to discuss spending cuts amid a rising debt crisis means President Biden is not acting in the public’s interest. 

But White House officials and Democrats believe the have much more leverage if they do not negotiate.

Here’s what’s behind the White House strategy.  

There’s a precedent 

One major reason the White House is confident in its position is that there have been numerous clean debt ceiling hikes in recent years, including when Donald Trump was president and Republicans controlled Congress. 

Congress has voted to increase the debt limit more than a dozen times in the last 25 years – including three times during the Trump administration.

In 2021, after Biden took office, Senate Republicans initially balked at support for a clean increase of the debt ceiling.  

But after months of talks, Senate Minority Leader Mitch McConnell (R-Ky.) and Senate Majority Leader Chuck Schumer (D-N.Y.) eventually brokered a deal where enough Republicans joined Democrats to approve a one-time exemption to the filibuster on raising the debt ceiling. No Republicans backed the actual vote to raise the limit, which passed 50-49.

The House, then controlled by Democrats, also passed the debt ceiling hike.

The administration has argued that a new debt ceiling increase covers bills the government has already racked up and does not cover new spending.

McConnell, for his part, downplayed the possibility of a crisis on Thursday.  

“No, I would not be concerned about a financial crisis,” McConnell told a gaggle of reporters following an event at the University of Louisville to discuss disaster relief funding.  

“In the end, I think the important thing to remember is that America must never default on its debt. It never has, and it never will,” he said. “We’ll end up in some kind of negotiation with the administration over what the circumstances or conditions under which the debt ceiling be raised.”   

Negotiations have led to pain 

President Obama did negotiate with House Republicans over raising the debt ceiling and cutting spending in 2011. Many Democrats rue those talks, which took place when Biden was vice president.  

An initial deal fell apart after then-Speaker John Boehner’s (R-Ohio) right-flank rejected any tax hikes that would have been coupled with reforms to Social Security, Medicare and Medicaid. It was those reforms or cuts that infuriated Obama’s liberal base.  

The White House and Congress then agreed to the Budget Reduction Act, in which spending ceilings were imposed on defense and non-defense spending in order to get a deal on raising the debt ceiling.  

The lesson many Democrats took from the painful era of automatic cuts known as sequestration is that negotiating with Republicans over raising the debt ceiling is a fool’s errand.  

Biden as vice president had a front-row seat to the chaotic negotiations, as were some staffers who serve in the White House now. The takeaway for many of those officials was that offering concessions will only embolden some conservatives who want to hold the debt ceiling ransom in exchange for drastic cuts. 

It is much better, from their view point, to just demand that the GOP raise the debt ceiling as has been done in the past. 

Jim Kessler, a co-founder of centrist think tank Third Way, said the White House’s strategy to insist Republicans move on this is a smart one, warning that House Republicans may have bad intentions when it comes to negotiating.

“The more Democrats can show what either a default means or the spending cuts would mean, the less support Republicans are going to have, which is why I think it’s a smart strategy,” Kessler said.

Biden thinks he has the higher political ground 

Refusing to negotiate can be a dangerous proposition, but the White House thinks raising the debt ceiling should not be about negotiations — especially if doing so could result in changes to Medicare and Social Security.  

They believe the public will back them on this, which is another reason why Biden and the White House are saying they won’t exchange spending cuts for a debt ceiling hike.  

“It is essential for Congress to recognize that dealing with the debt ceiling is their constitutional responsibility. This is an easy one. This is something that should be happening without conditions,” White House press secretary Karine Jean-Pierre said on Wednesday. 

If negotiations go down to the wire, the White House is confident that many Americans will hold Republicans responsible for any economic repercussions or changes to popular programs like Social Security and Medicare, putting significant pressure on the party’s moderates to cut a deal with Democrats.

Staking out an early position 

The Treasury Department has enacted “extraordinary measures” that will allow the U.S. to pay its debts for the next few months. While the exact timeline is unclear, it is believed lawmakers will have until June to broker a deal. 

By refusing to budge now, the White House thinks it will be better positioned to set the terms of the negotiations to come.

Experts believe some concessions are going to be unavoidable for the White House. Republicans control the House, and the roughly 20 conservatives who prevented McCarthy from being elected Speaker for several rounds of voting carry significant influence given the small margins.

Neil Bradley, executive vice president and chief policy officer at the Chamber of Commerce, said that a debt limit increase has to be bipartisan, despite the White House insisting now that they won’t negotiate. 

“If your goal is to avoid default, this is not a good strategic approach coming from the administration. And it kind of defies the reality, which is that there are bipartisan things that the Democrats or Republicans could reach agreement on to affect our fiscal situation. This approach from the White House simply seems to rule that out and ignore that reality,” Bradley said.

Biden frequently boasts about reducing the deficit during his first two years in office, and there may be some middle ground for the two sides in the months to come. But in the interim, the White House is laying down a marker that programs like Medicare and Social Security should remain untouched.

“I think this president is always interested in having serious bipartisan discussions to look, where we can find agreement,” Gene Sperling, a senior adviser to Biden who was in the White House during the 2011 talks. “Let’s be clear. We are not going to do it as a condition on the debt limit.”

Source: The Hill

Be First to Comment

    Leave a Reply

    Your email address will not be published. Required fields are marked *