Leadership dynamics explain why there’s still no debt limit deal
Multiple factors in play for Biden and McCarthy
Political calculations and concerns about legislative precedent within Congress and the White House have brought the government within a week of potentially failing to pay all of its debt obligations.
Speaker Kevin McCarthy, nearly five months on the job as the top House leader, is trying to maintain the good will he has fostered among his conference, particularly conservatives in the House Freedom Caucus who wouldn’t hesitate to push the California Republican out if they feel he betrayed them.
President Joe Biden wants to keep Democratic lawmakers and their constituencies happy ahead of his 2024 reelection bid, while also seeking to portray himself as a fair dealmaker to independents that he needs to win a second term.
And all the while Republican and Democratic leaders are trying to reach a legislative solution that sets a good precedent for their parties in future debt limit fights.
Those dynamics underscore why negotiators have yet to reach a deal to lift the statutory debt limit. Treasury Secretary Janet Yellen has warned if lawmakers don’t act before June 1 her department may run out of cash and accounting maneuvers needed to pay all government debt obligations.
The week before that “x date,” negotiators had begun narrowing their differences but made no promises about an imminent deal.
“Nothing's agreed to overall, but we know exactly where we need to be to solve this problem," McCarthy told reporters Thursday.
Rep. Patrick T. McHenry, one of McCarthy’s proxies negotiating with the White House, said getting a deal before the weekend “looks very difficult” as negotiators have yet to settle on “consequential” details surrounding spending levels and policy attachments.
“There's still significant work being done and thorny issues,” the North Carolina Republican said.
‘Substantial number of votes’
The negotiators’ ability to close a deal will depend in large part on how rank-and-file lawmakers react to the narrowing proposals.
“It’s not good for either side if they can't bring a substantial number of votes to the table,” Oklahoma GOP Rep. Tom Cole said. “That certainly would put the speaker in a challenging, long-term situation. And it’s not good for the president.”
McCarthy has vowed to deliver votes from a majority of his conference for any bipartisan deal he signs off on — a political necessity ingrained into House GOP leadership doctrine as much as a gesture of good will.
"I firmly believe what we're negotiating right now a majority of Republicans will see that it is a right place to put us [on] a right path," McCarthy said Monday.
Biden has not made any such public promises but delivering votes from a majority of his party would help ensure Democrats can sell any bipartisan compromise as a good deal.
“Any deal that the White House strikes has to be something that House Democrats also are a part of and at the table for,” Washington Democratic Rep. Pramila Jayapal said.
Jayapal said a whip survey of the 102-member Congressional Progressive Caucus that she chairs revealed “overwhelming” opposition to some of the proposals Republicans are pushing in negotiations.
“Our caucus overwhelmingly in our whip count said that they would not agree to a bill that has work requirements that hurt poor people, would not agree to a bill that has bad permitting reforms, would not agree to a bill that cuts spending that the American people need,” she said.
Conservatives, meanwhile, are expressing frustration at what they’re hearing may be a $3 trillion-plus debt limit increase without several policies included in the House-passed bill that would have lifted the borrowing cap by half that amount.
“My antenna is up that that does not seem to me to meet what our expectations are in terms of transformative substantive fiscal reforms,” Texas GOP Rep. Chip Roy said.
With a sizable number of Republicans on the right and Democrats on the left entrenched in polar opposition positions, negotiators will find extreme difficulty in crafting a deal that will draw enough votes down the middle and still get a majority support from both parties.
One of the main problems for McCarthy and his proxies is that some of his harshest critics aren’t willing to accept less than the House-passed bill. Those include the 20 Republicans that initially withheld their support for him in the January speaker’s election, which ended after 15 ballots and several concessions, including a commitment from McCarthy that he’d use the debt ceiling to fight for conservative spending policies.
The House Freedom Caucus has been urging McCarthy to “hold the line” on the House bill — despite the fact the measure could never get through the Democrat-controlled Senate.
“Have discussions just don't just don't give anything away,” House Freedom Caucus Chairman Scott Perry, R-Pa., said.
Virginia Rep. Bob Good, another Freedom Caucus member, said he would be “disappointed” if McCarthy were to move away from the House bill but he didn’t want to speculate on consequences for the speaker if he does so.
But Good, who voted “present” instead of backing McCarthy on his final ballot for speaker, warned that bringing a bill to the floor that increases the debt limit more than $1.5 trillion or otherwise “diminishes or reduces all of the great policy measures” in the House bill would “truly collapse the Republican majority.”
One of the concessions McCarthy’s critics won in the speaker’s race was a House rule change giving any single member the ability to force a vote on privileged motion to vacate — a procedural maneuver for ousting the speaker.
Several of the 20 initial McCarthy holdouts said they’re “not going there” when asked if they’d deploy the motion to vacate if McCarthy cuts a debt limit deal they don’t like.
“Kevin has done a good job. I'm not criticizing somebody who's done a good job to date,” South Carolina GOP Rep. Ralph Norman said. “But to raise the debt ceiling and not have tremendous concessions is un-American, and it shouldn't happen.”
Roy likewise dismissed current talk of the motion to vacate as “nonsense,” complimenting McCarthy and promising to “withhold judgment” until they see the final deal.
“But we also have to make sure we're exercising every tool at our disposal to make sure we're defending the American people,” he said.
Notably, Freedom Caucus members — who do not like to broadcast their tactics in advance of a play call —have not explicitly taken the motion to vacate off the table. Any perceived slights in this deal could also come up in the next speaker’s election.
The last two Republican speakers, Paul D. Ryan and John A. Boehner, voluntarily exited after just a few terms — just under two and a half for Boehner and barely one and a half for Ryan — in part because the right flank of the party caused them too much angst.
Freedom Caucus members feel McCarthy has been more open with them than Boehner and Ryan. But they view outcomes of legislative negotiations like the one taking place on the debt limit as the real test of leadership.
“Everybody's on the line at all times. That's what the speaker contest signified in January,” North Carolina GOP Rep. Dan Bishop said. “It's not acceptable to continue to maintain the status quo, to continue to get rolled on every spending question and controversy. That can't happen.”
Democrats, meanwhile, remain skeptical that an acceptable debt limit deal can be reached.
House Minority Leader Hakeem Jeffries told reporters Wednesday he has told the White House that Republicans may not be negotiating in good faith.
“It does appear increasingly likely that House Republicans want a dangerous default, they want to crash the economy and they want to trigger a job-killing recession,” the New York Democrat said.
Some Republicans “think that maybe it will help their election prospects in 2024 if the country is in chaos,” Jayapal surmised.
Democrats have avoided criticizing Biden and his negotiators directly while expressing concern about potential compromises that are on the table, like work requirements for low-income benefit programs and cutting spending below current levels.
Biden will have to sell any eventual bipartisan deal as good for Democrats. But as the negotiations proceeded Thursday, the president gave his first public remarks on the matter in days and warned that the two parties were not yet aligned.
“Speaker McCarthy and I have a very different view of who should bear the burden of additional efforts to get our fiscal house in order,” he said. “I don't believe the whole burden should fall on the backs of middle class and working class Americans."
Concern about setting legislative precedent for future debt limit fights is driving the hard bargain on both sides.
Democrats for months sought a “clean” debt limit, free of policy riders, to cement their belief the full faith and credit of the United States should never be negotiated or put in doubt.
Republicans demanded spending caps and other controls, arguing the debt limit is like paying off a credit card — you have to pay the bill but if you’re spending too much, you put together a budget that will avoid another hefty tab.
Democrats are particularly worried about another debt limit deal like the 2011 Budget Control Act that led to 10 years of sequestration-initiated spending caps that lawmakers routinely had to override to increase spending.
House Appropriations ranking member Rosa DeLauro said any agreement should not move backwards by setting a spending cap below the fiscal 2023 level.
“We also cannot go back to restaging in any way a Budget Control Act, which can lead to a sequester,” the Connecticut Democrat said.
Those fears are among the reasons many Democrats have said Biden should consider invoking the 14th Amendment, which states the validity of the public debt “shall not be questioned,” before giving away too much to Republicans.
“The lessons the Republicans will learn if they're successful is we did it once, let's do it again,” California Democratic Rep. Jimmy Gomez said. “They'll run the same play again, and again and again. And that is a bad precedent. The way you break it is we win a bigger majority in 2024.”
Laura Weiss and Avery Roe contributed to this report.