The latest debt ceiling posturing
Good morning! The debt ceiling is going to be hanging over Washington until the Treasury Department’s “extraordinary measures” run out around June — or until an agreement is reached. (But if recent history is any guide, that won’t happen until right before the deadline.)
Because of the immense economic consequences involved — here’s my explainer from last week — I’ll be covering it off-and-on until then, to keep you up-to-speed on this important showdown.
Here are the latest developments you should know about:
Biden, McCarthy set to meet.
President Biden and House Speaker Kevin McCarthy are expected to sit down together sometime in the next two weeks, before Biden delivers his State of the Union address on February 7.
McCarthy is crowing that even Biden agreeing to a meeting is a win for Republicans, since the president’s position has been that he will not negotiate at all on the debt limit.
White House press secretary Karine Jean-Pierre, however, maintained in her Tuesday briefing that Biden still believes the debt ceiling should be raised “without conditions” and described the McCarthy meeting as a routine start-of-year sit-down that will touch on a range of issues.
Manchin enters the chat.
A number of centrist lawmakers — exactly the ones who will be central to ushering through any eventual agreement — have criticized Biden for his no-negotiations stance. Rep. Brian Fitzpatrick (R-PA), a top GOP moderate, called the position “very irresponsible” in a Fox News interview; Sen. Joe Manchin (D-WV) told CNN that Biden, his party’s leader, is making a “mistake.”
“This is a democracy that we have,” Manchin added. “We have a two-party system, if you will, and we should be able to talk and find out where are differences are.”
Manchin himself got that ball rolling on Tuesday, venturing over to the House side of the Capitol to meet with McCarthy in the speaker’s office. The West Virginia told reporters that it was a productive meeting and even broke some news: that McCarthy agreed with him that spending cuts to Medicare and Social Security should not be part of the debt ceiling discussions.
Manchin also said that McCarthy was “receptive” to a possible compromise the West Virginia senator has been pushing: a debt ceiling increase in exchange for the creation of a bipartisan, bicameral commission to examine possible spending cuts. (The 2011 debt ceiling crisis resulted in a similar commission, dubbed the “Supercommittee,” which eventually concluded without being able to agree on a single spending cut.)
What to cut?
McCarthy’s news — via Manchin — that the GOP won’t push for entitlement cuts during the debt ceiling fight highlighted a central issue that Democrats have been hammering all week: Republicans have yet to outline the specific spending cuts they want as part of a debt ceiling deal.
“Do they want to cut Social Security? Do they want to cut Medicare? Do they want to cut veterans benefits? Do they want to cut police? Do they want to cut food for needy kids?” Senate Majority Leader Chuck Schumer asked on Tuesday as he left a meeting at the White House. “What’s your plan? We don’t know if they can even put one together.”
Indeed, most Republican lawmakers have come up blank when asked by reporters to name the spending cuts they’re seeking. “There’s gotta be cuts in spending,” Rep. Marjorie Taylor Greene (R-GA) told NBC News this week. “That’s gotta happen.” But asked which programs she wanted to see cut, Greene responded: “I haven’t really formulated an exact list.”
Conservatives like Greene often push for a “balanced budget,” in which federal spending does not exceed the revenue taken in by taxes, but others in the party are unwilling to touch defense spending or entitlements — an unworkable math problem.
“If you take off the table cuts to Medicare, Social Security, veterans and defense spending, and if you’re also not going to raise taxes to bring in more revenue, you’d need to cut about 85% of the rest of the budget in order to make it balance,” Axios recently noted, citing an analysis by the non-partisan Committee for a Responsible Federal Budget.
McConnell tags out.
In 2011, it was Senate Minority Leader Mitch McConnell and then-Vice President Biden who hammered out a debt ceiling deal at the last minute, pulling the U.S. away from the brink of default.
But this time around, McConnell insists that the ball is in McCarthy’s court to negotiate with Biden. “I can’t imagine any debt ceiling provision passed out of the Senate with 60 votes could actually pass this particular House,” McConnell said at his Tuesday press conference. “So I think the final solution to this particular episode lies between Speaker McCarthy and the president.”
“I wish him well in talking to the president,” McConnell simply added, effectively removing himself from the equation.
However, deadlines have a way of changing things. In 2011, it wasn’t until two days before the U.S. was set to default that Biden and McConnell agreed on a deal. If McCarthy is unable to strike an agreement with Biden, he may have to turn to his Senate counterpart for help.
Biden and McConnell, after all, are two of the only guys around who have been in a similar situation before and successfully hashed out a deal.
A few more updates:
- Biden is expected to speak about the debt ceiling during a speech in Virginia today, in which he will criticize Republicans for demanding spending cuts and floating a national sales tax bill.
- Per Roll Call, House Republicans are considering offering a proposal that would temporarily suspend the debt ceiling until this summer, punting the debt fight until it aligns with the September 30 government funding deadline.
What else I’m watching.
Meta announced that it will allow former President Trump back on Facebook and Instagram. “Our determination is that the risk [to public safety] has sufficiently receded,” Facebook executive Nick Clegg wrote in a blog post Wednesday.
The move — which ends a suspension that took effect just after the January 6th attack — will hand Trump a louder social media megaphone (and a powerful fundraising tool) as he ratchets up his 2024 presidential campaign. Elon Musk also recently ended Trump’s ban from Twitter, although the ex-president has so far remained on his own social media platform Truth Social, where his posts have a much smaller reach.
In his post, Clegg wrote that Facebook would also be introducing new “guardrails” around Trump’s account, including threats that QAnon-related posts or content that “delegitimizes an upcoming election” could see restrictions.
What kind of posts can Meta expect from Trump once he comes back? Well, here’s what the former president posted Monday on Truth Social:
Just to recap: That’s the 2024 Republican presidential frontrunner insinuating that it is somehow suspicious that Joe Biden’s vice presidential documents were stored in a building in D.C.’s Chinatown neighborhood, and using a racist nickname to suggest that his own former Cabinet secretary Elaine Chao played some sort of role.
The Chinatown neighborhood, of course, has no connection to China the country. Chao, who was born in Taiwan, did not serve in the Obama administration or under Biden as vice president.
Chao, who is married to Mitch McConnell, fired back at Trump in a statement to Politico.
Plus, a few more headlines:
- “The U.S. economy grew by 2.9% in the fourth quarter, more than expected” CNN
- “Archives weighs asking past presidents, VPs to look for classified items” WaPo
- “Marjorie Taylor Greene aims to be Trump’s VP pick in 2024” NBC
- “Massachusetts congressman reads AI-generated speech on House floor” Fox News
What the government is doing today.
All times Eastern.
President Biden will deliver remarks on the economy in Springfield, Virginia. He will also receive his daily intelligence briefing and host a Lunar New Year reception. [Watch the economic speech at 2:45 p.m. ... Watch the reception at 5:30 p.m.]
Vice President Harris will return to Washington today from Los Angeles, where she spent the night after visiting the site of the recent mass shooting in Monterey Park, California, yesterday.
Second Gentleman Doug Emhoff will depart Washington today for Krakow, Poland, the first leg of a trip focused on combatting anti-semitism around the world.
White House press secretary Karine Jean-Pierre has no press briefing scheduled.
The Senate has one vote scheduled: on a resolution to designate January 2023 as “National Stalking Awareness Month.” [Watch today’s Senate session starting at 10 a.m.]
The House will begin consideration of the Strategic Production Response Act, which would limit the Energy Department’s ability to tap into the Strategic Petroleum Reserve — which the Biden administration has been doing in response to spiking gas prices — until the department develops a plan to increase oil and gas production on federal lands.
Notably, the measure will be considered under a “modified open rule,” which means any amendment to the bill that was submitted by yesterday will receive a vote on the House floor. This is the first time since 2016 that a piece of legislation has received such a freewheeling process on the House floor. [Watch today’s House session starting at 10 a.m.]
The Supreme Court has no oral argument scheduled until February.
Before I go...
Here’s one more news story I found interesting. Classified documents seem to be turning up everywhere: Homes. Private offices. Even an eighth grade show-and-tell?
At least that was the case in 1984, when 13-year-old Kristin Preble showed up to school in Pittsburgh with a zipped briefcase full of classified documents.
Her father had found the documents in a Cleveland hotel room, apparently left behind by Jimmy Carter’s press secretary, a decades-old example of classified document being mishandled.
Her teacher recalls poring over the documents with his wife that night — they contained “everything you’d want to know from A to Z” about world developments, he said — before calling the FBI to retrieve the materials.
The Associated Press has the full story.
Thanks for reading.
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