5 takeaways on the looming debt ceiling deadline crisis

Illinois House Democrats are divided over whether President Biden should invoke the 14th Amendment to let the federal government borrow money over the debt limit. GOP pushing for work requirements for public benefits.

SHARE 5 takeaways on the looming debt ceiling deadline crisis
Hiroshima Hosts G7 Summit

President Joe Biden speaks during a news conference following the Group of Seven leaders summit on May 21, 2023, in Hiroshima, Japan. President Biden called Republican demands for sharp spending cuts unacceptable.

Kiyoshi Ota-Pool/Getty Images

WASHINGTON — Standing side by side on the default cliff, President Joe Biden and House Speaker Kevin McCarthy on Sunday agreed only to meet on Monday as a global economic crisis looms if no deal is made.

Top staffers continued debt ceiling negotiations while Biden was in Japan for the Group of 7 summit, but no progress was made.

“I’m hoping that — that Speaker McCarthy is just waiting to negotiate with me when I get home,” Biden said at his G7 wrap-up press conference Sunday in Hiroshima.

Congress must raise the debt ceiling, the legal limit on the government’s power to borrow to pay its bills, by June 1 — that’s the date set by Treasury Secretary Janet Yellen — or risk running out of cash and defaulting on payments due.

If the federal government can’t pay its bills, the impact would be vast — and would particularly hit seniors if Medicare is not paying doctor bills and if states don’t get their share of Medicaid funding. Though Medicaid is often seen as providing health coverage for low-income individuals, it’s also the program that pays nursing home costs for seniors who once had money — were part of the middle class — only to have their life savings drained after being in nursing homes for years.

Here are 5 takeaways:

Boiling it down a bit

When it comes to domestic discretionary spending, Republicans want more spending cuts than the Democrats have put on the table. They also want strings attached — that is work requirements — for some safety net programs such as the Supplemental Nutrition Assistance Program, formerly known as the “food stamps” program.

Democrats see work requirements as punitive, a way for Republicans to play to their base with little meaningful fiscal impact when the government is dealing with trillions of dollars in spending.

Biden is open to spending cuts on some domestic spending — sparking Democratic ire — but is insisting, as he said Sunday, on also raising revenue — mainly by insisting that tax loopholes be closed and enforcement increased so billionaires in this country pay their fair share.

The two most important numbers: 218 and 60.

To keep this simple — the answer to the question, what will it take to make a deal and avoid a fiscal catastrophe is this: Anything that can muster the bare minimum of votes needed to pass.

The policies and underlying politics needed to get to these numbers — 218 in the House if all the members are present and voting and 60 in the Senate — are difficult. The GOP controls the House by only a few votes; same thing for the Democrats in the Senate.

McCarthy’s right wing

What is different this time is the toxic political environment we’re in, where a former president, Donald Trump, the 2024 frontrunner for the GOP presidential nomination — is urging his MAGA election-denying followers to not compromise, even if it means a default that could trigger a recession and related fiscal calamities.

MAGA House Republicans have enormous power because the GOP controls the House by only a few votes. McCarthy is beholden to the most extreme MAGA Republicans who backed his speaker bid. He has almost no votes to spare.

Biden’s left wing and the 14th Amendment: Divided Illinois Democrats mirror Dem split in Congress

On the Democratic side in the House, there are about 66 progressives who are on the extreme of their party. They are pressuring Biden not to, as they said in a May 19 letter to the president, be “surrendering” to GOP “hostage taking.”

The progressives called on Biden to invoke the 14th Amendment. That amendment has a public debt clause that, proponents are arguing, gives a president constitutional power to override a mere statute passed by Congress placing a limit on federal government borrowing.

The Illinois House Democrats signing that Congressional Progressive Caucus letter: Reps. Danny Davis, Jan Schakowsky, Jesus “Chuy” Garcia, Delia Ramirez and Jonathan Jackson.

Illinois Democrats not a part of this: Reps. Robin Kelly, Mike Quigley, Sean Casten, Raja Krishnamoorthi, Brad Schneider, Bill Foster, Nikki Budzinski, Lauren Underwood and Eric Sorensen.

Biden on Sunday made it clear that he was hearing the calls from the progressives when he said at his press conference that he was looking at the 14th Amendment. That threw them a rhetorical bone, but not much more. Biden also said that if he took that unilateral action, he would be hauled into court — not at all a practical solution with the June 1 deadline.

Staffers for the CPC have been polling members over the past few days to determine their hard-line positions — it may be work requirements — to figure out where they may be able to compromise, the Sun-Times has learned.

Over in the Senate, Sen. Bernie Sanders, the Vermont independent, and Sen. Elizabeth Warren, D-Mass., are among the handful in that chamber also calling on Biden to use the 14th Amendment.

On Sunday, Sen. Tammy Duckworth, D-Ill., in an MSNBC interview, said she opposed trying the 14th Amendment workaround. “I worry about the unintended consequences and the timing of such a move,” she said.

“Yes, it remains on the table, and certainly the president can invoke it, but it will immediately go through the court system. I think the better thing to do is just to raise the debt ceiling, pay our credit card bill because it’s come due, don’t default on our debt, and then have a conversation as a family about where do we need to cut back on spending.”

What a bipartisan deal could look like in the House

Some of the MAGA Republicans vote no on a bipartisan deal, joined by some of the Democratic progressives rejecting that compromise. That would leave plenty of members left to get to 218.

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