pIncumbent Joe Biden wants to campaign for re-election, but first he will have to survive the debt ceiling showdown.
On the same day Biden announced for 2024, the Congressional Budget Office released its score for the Republican-led Limit, Save, Grow Act, setting off a war of words from both political parties.
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The act would save $4.8 trillion through fiscal year 2023, according to the CBO, with $545 billion of that coming from interest savings alone.
“The House deserves credit for coming up with a sensible proposal that will help the Federal Reserve fight short-term inflation and generate significant savings at a time when they are desperately needed,” says an analysis by the nonpartisan Committee for a Responsible Federal Budget . . “Additional changes would be needed to keep the debt at manageable levels, including addressing rising health care costs and the solvency of trust funds. We suggest including a fiscal commission to address the long-term factors of the debt.”
While the analysis also calls for raising the debt ceiling as soon as possible, the act itself received a very different reception from the Biden White House.
Calling it the “Cut to Growth Act,” White House Communications Director Ben LaBolt criticized the bill.
“Speaker McCarthy has struck a deal with the most extreme MAGA elements in his party to speed up food assistance for hundreds of thousands of elderly Americans and to pull an industry out of its draconian cuts without making a single change to provisions that gut health care. services for veterans, cut access to Meals on Wheels, eliminate health care coverage for millions of Americans and send manufacturing jobs overseas,” LaBolt said.
That was one of several statements the White House issued Wednesday morning that described House Speaker Kevin McCarthy’s (R-CA) proposal as extreme and harmful to the poor. On Tuesday, White House press secretary Karine Jean-Pierre called McCarthy’s plan cruel and dangerous. The House passed it later that day.
But despite the tough rhetoric, Biden will have to strike a deal with McCarthy to avoid an economic disaster in defaulting on the nation’s debt this summer.
The White House insists it won’t negotiate with House Republicans, saying raising the debt ceiling is Congress’ constitutional duty and noting the House did so three times under then-President Donald Trump.
McCarthy met with Biden in January to begin negotiations on the debt ceiling, but that meeting ended without a binding agreement because the White House maintained it would not discuss federal spending until the debt limit was lifted. McCarthy said he has not spoken to Biden since that initial meeting, accusing the president of “walking his way into the first breach in the history of our nation.”
The showdown is reminiscent of one between then-President Barack Obama and a GOP-led House 10 years ago, which did not lead to a default but did lead to a historic downgrade of the US debt. Neither side will want to see a repeat of this scenario, especially as Biden launches a campaign slogan promising to “finish the job” he started.
Polls show a sizable number of voters say they don’t want the debt ceiling raised, including 54 percent of respondents in a recent CBS News-YouGov poll. Even when told that not raising the ceiling would cause America to default, 30% still said they don’t want it to go up.
At the moment, both sides of the debate point the finger at the other as guilty of the impasse.
“Joe Biden wants a fight over the debt ceiling, but I’ve got news for him and his party: You’ve played yourselves,” Rep. Byron Donalds (R-FL) tweeted. “The Republicans have a plan for the American people, and the Democrats look ridiculous for refusing to negotiate. Play stupid games, win stupid prizes.”
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Biden himself was asked about the negotiations during Wednesday’s news conference with the South Korean president and pointed out.
“I’m happy to meet with McCarthy, but not on whether or not to extend the debt limit. That’s non-negotiable,” he replied. “I notice they quote Reagan all the time and they quote Trump, they both said — I’m paraphrasing — that it would be an absolute crime not to extend the debt limit.”