The US Approaches the Debt Ceiling: Biden Negotiates with Republicans Amidst Growing Backlash from Progressives
As the US government approaches the debt ceiling, negotiations between Democrats and Republicans have intensified, with President Joe Biden meeting with top congressional leaders to try to broker a deal. However, the talks have hit a snag, with Republicans pushing for steep spending cuts in exchange for raising the debt ceiling, something Democrats have rejected. The lack of a credible primary challenge to Biden’s reelection has given him room to negotiate, but his private resistance to progressive demands has frustrated some within his own party. Meanwhile, Treasury Secretary Janet Yellen has warned that the US could run out of cash to pay its bills as early as June 1 if a deal is not reached.
The talks between Biden and Republicans have been focused on a bipartisan deal that could pass both the House and Senate, but it remains to be seen whether such a deal could even get through the House. While Democrats initially stayed quiet on Biden’s apparent capitulation to Republicans, the president's consideration of concessions, such as adding work requirements to social safety-net programs, has begun to stir backlash from progressives.[0]
Biden has said that he sees a bipartisan deal as the only option to the current standoff, casting doubt on the use of the 14th Amendment as a workable solution. However, at least 11 Senate Democrats are urging Biden to invoke his constitutional authority under the 14th Amendment to raise the nation’s debt limit without having to go through Congress.[1] 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.”
The debt ceiling is the limit on the amount of money the US government can borrow to pay for services such as social security, Medicare, and the military. Congress is constitutionally required to authorize the issuance of debt, which then allows the government to borrow to meet its existing legal obligations.[2] The US hit its $31.4tn borrowing limit in January, and unless the debt limit is raised or suspended by Congress, the federal government will lack the cash to pay all its obligations.[3]
As time is rapidly dwindling for lawmakers to reach a consensus on the debt ceiling, the two opposing parties continue to engage in a heated exchange, all while facing the unprecedented possibility of defaulting for the first time in history.[4] The lack of a deal could cause harmful effects across the financial system, and Yellen has warned that the US could run out of cash to pay its bills as early as June 1, though the exact date remains uncertain.
The situation is further complicated by House Republicans’ demands for steep spending cuts in exchange for their votes to raise the debt ceiling. The GOP wants to cap overall discretionary spending at fiscal year 2022 levels while allowing for 1 percent growth per year for 10 years. The proposal has been criticized by Democrats who argue that it would severely undermine crucial domestic programs as the GOP is unwilling to reduce defense spending, which accounts for almost half of all discretionary expenditures.[5]
As the negotiations continue, the fate of the US economy hangs in the balance. While Biden remains optimistic about the possibility of a bipartisan deal, the lack of progress and the looming deadline have raised concerns about the potential consequences of a default.
0. “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/
1. “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
2. “Nine questions you may have about the debt ceiling” NPR, 15 May. 2023, https://www.npr.org/2023/05/15/1175733139/debt-ceiling
3. “What to Know About the History of the Debt Ceiling” TIME, 18 May. 2023, https://time.com/6281003/debt-ceiling-history
4. “After optimism, debt ceiling talks on ‘pause,' McCarthy's top negotiator says” ABC News, 19 May. 2023, https://abcnews.go.com/Politics/debt-ceiling-talks-pause-mccarthys-top-negotiator/story?id=99459051
5. “‘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/
