US Debt Ceiling Negotiations Hit Roadblocks as Deadline Nears
As the United States nears the deadline to raise the debt ceiling, negotiations between the Biden administration and Republican leaders have hit roadblocks. While both sides had expressed optimism after their meeting earlier this week, talks were paused on Friday following a lack of progress. The debt ceiling refers to the limit on the amount of money the US government can borrow to pay for services such as Social Security, Medicare, and the military.[0] The debt limit currently stands at $31.4tn, and Congress is constitutionally required to authorize the issuance of debt.[1] Failure to raise or suspend the debt limit could lead to a default on the country's debt, causing harm across the financial system.[1]
Democrats have largely stayed quiet on President Biden's apparent willingness to make concessions to Republicans, and he has admitted that a bipartisan deal is the only option to the current standoff.[2] However, progressives worry that he is too readily giving up his leverage and that he is considering concessions that would be anathema to them.[3] One such concession is the possibility of adding work requirements to social safety-net programs.[2]
The private resistance being registered by his aides has frustrated progressives, and it threatens to fracture months of party unity behind Biden's debt ceiling strategy, exposing the White House to increasingly vocal criticism just as it enters the final stage of its high-stakes standoff with the GOP.[3] The lack of a credible primary challenge to Biden's reelection has given him room to negotiate, as Democrats fret about the effect that a default could have on the president's already tenuous public standing.[2]
House Speaker Kevin McCarthy has secured no substantive commitments from Biden, nothing specific that he can sell to his party.[2] The speaker has been pushing for a spending cap for next year that goes beyond a freeze on the current top-line number and actually rolls back government spending to 2022 levels. For a decade, House Republicans have advocated for limitations on discretionary spending, with plans to return to fiscal 2022 levels next year and then permit a yearly increase of 1 percent. The proposal has been criticized by Democrats who argue that it would severely impact crucial domestic programs, as the GOP is not willing to reduce defense spending, which accounts for approximately 50% of all discretionary expenses.[4]
At least 11 Senate Democrats are urging Biden to invoke what they say is his constitutional authority under the 14th Amendment to raise the nation's debt limit without having to go through Congress.[5] Some of the senators include Tina Smith (D-Minn.), Bernie Sanders (I-Vt.), Ed Markey (D-Mass.[6]), Jeff Merkley (D-Ore.), and Elizabeth Warren (D-Mass.).[6] In the House, 66 members of the Congressional Progressive Caucus have called on Biden to “choose a solution invoking the 14th Amendment of the Constitution over a bad deal.”[3]
Biden has said he is considering using the 14th Amendment, but he cast some doubt on whether it could work.[5] The 14th Amendment is a provision in the US Constitution that prohibits states from denying any person “equal protection of the laws” and guarantees all people “due process of law.”[5] Some lawmakers argue that it gives the president the authority to raise the debt ceiling without congressional approval.
Meanwhile, Treasury Secretary Janet Yellen has warned that the U.S. could run out of money as soon as June 1, adding extra urgency to the talks.[7] While both sides have resumed negotiations, time is quickly running out for lawmakers to find a debt ceiling compromise.[8] An agreement needs to happen by this weekend in order for the House and Senate to have time to debate and pass it by early June.[2]
0. “What is the US debt ceiling and what will happen if it is not raised?” The Guardian, 30 Apr. 2023, https://www.theguardian.com/business/2023/may/16/what-is-debt-ceiling-limit-explainer
1. “Charting the Rise of America's Debt Ceiling” Visual Capitalist, 17 May. 2023, https://www.visualcapitalist.com/rise-of-americas-debt-ceiling/
2. “Biden Has Already Caved on the Debt Ceiling” The Atlantic, 16 May. 2023, https://www.theatlantic.com/politics/archive/2023/05/biden-gop-debt-ceiling-negotiation/674070/
3. “Biden's 14th Amendment message on the debt ceiling: It won't happen – POLITICO” POLITICO, 19 May. 2023, https://www.politico.com/news/2023/05/19/biden-14th-amendment-debt-ceiling-00097930
4. “‘Pause' lifted, debt limit talks back on” Roll Call , 19 May. 2023, https://www.rollcall.com/2023/05/19/graves-debt-limit-talks-on-pause/
5. “What to Know About the History of the Debt Ceiling” TIME, 18 May. 2023, https://time.com/6281003/debt-ceiling-history
6. “Debt ceiling: Why is Biden being asked to invoke the 14th Amendment? – POLITICO” POLITICO, 19 May. 2023, https://www.politico.com/news/2023/05/19/14th-amendment-biden-debt-ceiling-00097932
7. “Debt ceiling deadlock centers on 2024 spending levels” Axios, 19 May. 2023, https://www.axios.com/2023/05/19/debt-ceiling-2024-spending-levels
8. “Debt ceiling talks end after briefly resuming, McCarthy's top negotiator says” ABC News, 20 May. 2023, https://abcnews.go.com/Politics/debt-ceiling-talks-end-after-briefly-resuming/story?id=99459051
