Congress left the Capitol this week without reaching a compromise to prevent a disastrous debt ceiling default that could happen in as little as three weeks.
President Joe Biden and House Speaker Kevin McCarthy (R-CA) were supposed to meet on Friday. NBC News reports that the meeting has been postponed until next week as top aides continue negotiating to make more progress before the major negotiators are called in.
Democrats have insisted on a “clean” (blank check) debt ceiling increase from Republicans for weeks. In contrast, Republicans have insisted that Democrats make spending concessions that would couple a debt limit increase with a budget agreement.
A potential bipartisan agreement would take the budget negotiations and kind of blend it in with the raising of the debt ceiling, according to Sen. Lindsey Graham, R-S.C., who is a member of the Budget Committee, which chooses the annual topline spending figures for the government, and the Appropriations Committee, which distributes that funding. In September, Graham said they got to fund the government someday.
Graham believes that the parties can maybe agree on some top lines that would show some fiscal restraint and raise the debt ceiling.
The four policy areas where Republicans and Democrats might be able to reach an agreement were proposed by Rep. Garret Graves (R-LA):
- Reclaiming unused funds money for Covid relief
- Reforming the permitting procedure for energy and infrastructure projects
- Putting expenditure limits on prospective bills for government funding
- Increasing work requirements for recipients of federal help
Graves, who is McCarthy’s biggest ally, believes that there’s a very good chance to make it work.
According to Rep. Dusty Johnson (R-SC), the four areas are the “lowest hanging fruit” where there may be bipartisan agreement.
According to Johnson, who is in charge of the GOP Main Street Caucus, all Republican requests, according to the White House, are impossible to implement. They will assert that nothing will be accepted.
“I’ll take it anywhere I can get it,” Senator Joe Manchin (D-WV) said. Manchin added that this should be a bipartisan permit reform bill.
The former president made the following statement on CNN’s Town Hall on Wednesday night to his Republican colleagues “If they don’t give you massive cuts, you’re going to have to do a default.”
The effects of default might not be as disastrous as everyone anticipates, according to Trump, who claims that while he doesn’t believe one is likely, “it’s better than what we’re doing right now because we’re spending money like drunken sailors.” He also suggests that it’s psychological more than anything else and that maybe you have a bad week or day.
Sen. Chris Coons (D-DE) said in a statement to NBC News that former President Trump’s casual remark, “Eh, just go ahead and default,” was “dangerous and irresponsible.”
When questioned about Trump’s remarks inciting default on Thursday, McCarthy quickly switched to criticizing Biden and insisted that only House Republicans in Washington have supported legislation to raise the debt ceiling. The McCarthy proposal would reduce significant aspects of Biden’s program while increasing the federal borrowing limit by $1.5 trillion or until March, whichever comes first.
McCarthy told reporters on Thursday, “I’ve watched President Biden not want a deal” and want the default, criticizing Democrats for the standoff and claiming that House Republicans are “the only ones who’ve raised the debt limit.”
The Treasury Department claims that if the borrowing cap is not increased, the nation will begin to default on its obligations on June 1. However, the CBO (Congressional Budget Office ) is now saying July.