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The president’s “no negotiations” playbook comes after more than a decade of hostile debt fights, during which Biden was often an influential dealmaker. When Democrats fired up bipartisan talks upfront, like in 2011, it ended in major spending cuts and economic fallout. When they wouldn’t engage from the beginning, like 2013, House Republicans eventually unraveled their own ultimatums.
Having lived that history, Biden now continues to goad House Republicans to show they can rally around a plan for fiscal reforms, as the nation approaches the threat of a summer default on its more than $31 trillion debt.
If the past is prologue, the strategy is still a setup for an economically bruising impasse that ends with some budget concessions. Over the last decade, Democrats were often willing to eventually agree to more minor fiscal changes than the deep spending cuts their colleagues initially sought.
“If the president looks back at recent history and is fair-minded about it,” said Sen. John Kennedy (R-La.), “what he will see is that it’s always a negotiation process.”
Many Democrats argue there are two significant but nuanced differences between the current debate and past debt-limit deals: first, that the party demanding concessions hasn’t made an offer; second, the growing concern that, this time, Republicans would let the nation default on its debt if they can’t extract their tradeoffs.
“If they’re willing to actually pull the trigger, then that’s the difference,” said Senate Budget Committee Chair Sheldon Whitehouse (D-R.I.).
Here’s how negotiations went down the last 10 times Congress acted on the debt limit:
Ceiling at the time: $28.4 trillion
How it went down: Just as they’re doing this year, Republican lawmakers insisted in 2021 that they wouldn’t vote to raise the debt limit without major changes to the federal government’s spending habits.
But things were different from the current standoff in one big respect — Democrats controlled both chambers of Congress and the White House at the time, giving them the power to raise the limit on their own. But they made a concerted decision not to.
With slim majorities in the House and Senate, Democrats could have used filibuster protections afforded by congressional budget rules to hike the nation’s borrowing limit without any Republican help. Instead, they zipped up their budget measure without any mention of the debt limit, effectively challenging Senate Republicans to help them avert a disaster.
In the end, both sides caved a little, joining forces to punt for two months and then to create a one-time filibuster loophole that allowed Senate Democrats to raise the cap with a simple majority vote.
Concessions: No major fiscal changes were tied to the deal. But it delayed some cuts to Medicare and other health programs.
How close? The brinkmanship rattled Wall Street for almost three months, exacerbating stock volatility as the Treasury Department came just one day away from defaulting on U.S. debt by the time Congress finally acted.
Ceiling at the time: $22 trillion
*The limit was waived for two years, allowing $6.4 trillion in new debt.
How it went down: Donald Trump didn’t want a market-rattling debt crisis a year before his reelection bid. Steven Mnuchin didn’t want to be the first Treasury secretary to lead the nation through a default. And lawmakers in both parties were keen on ensuring the debt limit wouldn’t plague them right before the 2020 elections.
With that common interest, Mnuchin and former House Speaker Nancy Pelosi conducted high-stakes talks for weeks, as the Treasury chief led negotiations for the White House. Mick Mulvaney, Trump’s acting chief of staff at the time, and Russ Vought, then the White House budget chief, were also in the mix, both unsuccessfully pushing to freeze federal spending.
Mnuchin and Pelosi ultimately hammered out a two-year budget deal that provided a bigger funding boost for domestic programs than it did for the military, in a win for House Democrats. Trump even took to Twitter to whip Republican support in the House, with limited success.
Only 65 out of 197 House Republicans ended up voting for the measure, with most rejecting the pleas from Trump and their own leadership.
Concessions: The two-year deal raised spending caps by about $320 billion. If the two parties had not struck a deal, $126 billion in sequestration cuts would have set in, ravaging every discretionary account in the federal government.
How close? Trump signed the bill about a month before the U.S. was expected to default.
Ceiling at the time: $20.5 trillion
*The limit was waived for 13 months, allowing $1.5 trillion in new debt.
How it went down: What started as a classic bipartisan budget deal devolved into a brief government shutdown.
After months of closed-door negotiations, then-Senate Majority Leader Mitch McConnell and then-Minority Leader Chuck Schumer locked in a plan to raise spending caps, increase the debt limit and fund the government.
Then-President Trump gave his blessing, and the deal enjoyed bipartisan support in both chambers. But Rand Paul wasn’t happy, and the Kentucky Republican temporarily blocked the bill from passing the Senate, demanding a vote to strip the debt limit increase from the package and keep the government under strict budget caps.
There was drama in the House, too. Then-Minority Leader Pelosi tried to whip her caucus to oppose the bill, protesting Republican inaction on honoring legal status for young undocumented immigrants and delivering an eight-hour floor speech on the issue. But the California Democrat failed to tank the vote, with 73 Democrats supporting passage.
Concessions: The bipartisan agreement raised military and non-defense spending caps by about $300 billion over two years and provided nearly $90 billion in disaster aid.
How close? The debt-limit suspension came about a month before Treasury was set to fully exhaust its borrowing authority.
Ceiling at the time: $19.8 trillion
*The limit was waived for three months, allowing $700 billion in new debt.
How it went down: In a move that shocked Hill Republicans, Trump unexpectedly sided with Democrats to back an offer that waived the debt limit and extended government funding for three months, while providing disaster relief for Hurricane Harvey.
Trump’s support for the hurricane and fiscal relief patch dealt a blow to the rest of his party. Fellow Republicans saw him as abandoning any shred of GOP leverage while Democrats pushed to negotiate a high-stakes year-end government funding and debt-ceiling deal, in addition to an immigration overhaul, all in quick succession. The GOP had originally hoped to extend the debt limit through the 2018 midterm elections.
Concessions: The package provided $15 billion in emergency funding to aid recovery from Hurricane Harvey, the storm that made landfall in Texas and Louisiana that summer, killing more than 100 people and causing well over $100 billion in damage.
How close? The deal was signed into law just weeks before the U.S. was forecast to default on its loans.
Ceiling at the time: $18.1 trillion
*The limit was waived for about 16 months, allowing $1.7 trillion in new debt.
How it went down: The debt ceiling suspension was part of a closely held, last-minute budget deal Republican congressional leaders struck with then-President Barack Obama, as much of Washington was distracted by then-Speaker John Boehner’s resignation announcement.
Just 12 days before the U.S. was set to default, Boehner and McConnell told Obama they couldn’t pass a “clean” debt ceiling increase, with Republicans demanding entitlement changes and Democrats pushing for more domestic spending.
So the trio embarked on speedy talks that resulted in a two-year budget accord, ultimately ending years of bitterly partisan fiscal battles exacerbated in part by the rise of the Tea Party. The agreement took the debt ceiling off the table for the rest of Obama’s presidency and capped Boehner’s career in Congress, after the Ohio Republican’s long struggle to keep his conference in line.
Concessions: Both sides emerged from the breakneck talks claiming wins. Democrats lauded domestic spending increases and some tweaks to Social Security and Medicare, and Republicans celebrated more money for the military and changes to entitlement programs. Democrats and Republicans were also able to relax the discretionary spending caps that had been put in place years earlier, squeezing priorities on both sides of the aisle.
How close? Obama signed the bill one day before the government was set to max out its borrowing authority.
Ceiling at the time: $17.2 trillion
*The limit was waived for about 13 months, allowing $900 billion in new debt.
How it went down: The White House and congressional Democrats refused to accept anything but a “clean,” one-year debt limit increase. Boehner, unable to rally enough support from within his GOP ranks for any kind of debt hike, ultimately had to rely on Democrats to push the measure through the House.
Boehner was forced to capitulate despite his prior insistence that any debt ceiling increase must be accompanied by “significant spending cuts and reforms to reduce our debt.” Senate Republicans also didn’t protest the measure; they were more concerned about getting out of town before a snowstorm than getting mired in a fiscal fight. With only 45 seats in the Senate, Republicans also weren’t in a position to drive policy.
Boehner had floated a number of policy sweeteners in an effort to win support from House Republicans, including Obamacare changes and a reversal of cuts to military pensions. But rank-and-file Republicans rejected each offer, and several dozen hardline conservatives refused to raise the borrowing limit no matter what.
Concessions: No strings attached this time.
How close? Treasury was expected to run out of cash-conserving tricks in less than a month.
Ceiling at the time: $16.7 trillion
*The limit was waived for about four months, allowing $500 billion in new debt.
How it went down: Boehner promised a “whale of a fight” as debt limit talks heated up that summer. It was, and he lost.
Similar to this year’s dynamic, Democrats made a pact to negotiate nothing until Republicans helped waive the debt limit and fund the government. One assumption underpinned that strategy: House Republicans, even with a hearty majority, couldn’t pass any debt limit remedy on their own thanks to conservative resistance.
And indeed, Republicans insistent on killing Obamacare ended up crushing every idea Boehner proposed for handling the debt limit and funding the government. The House impasse spurred a 16-day government shutdown and took the nation to the brink of debt default.
Throughout the protracted fight, interpersonal drama erupted within both parties. Then-Senate Majority Leader Harry Reid was mad about concessions Biden had made during previous debt-limit negotiations and shut the then-vice president out of direct negotiations with lawmakers. Many Senate Republicans turned on Sen. Ted Cruz as the Texas Republican led the anti-Obamacare push.
Finally, a bipartisan deal born in the Senate ended the government shutdown and staved off debt default. Not a single House Democrat voted against the plan, while 144 of the chamber’s Republicans — more than 60 percent — opposed the bill despite urging from their leadership. Across the Capitol, 81 senators voted yes, with 18 Republicans opposed.
Concessions: The deal included a plan for House and Senate leaders to appoint negotiators to hash out a budget agreement by mid-December that year, while giving Congress formal power to disapprove of the debt-ceiling increase.
How close? Congress got the debt-limit suspension to Obama’s desk with one day to spare before Treasury expected the government would default.
Ceiling at the time: $16.4 trillion
*The limit was waived for about four months, allowing $300 billion in new debt.
How it went down: Republicans began with demands for dollar-for-dollar spending cuts to match any increase in the nation’s borrowing cap. Democrats wanted the debt limit waived past the 2014 midterms, an election that ended up relegating them to the minority in both chambers.
In the end, the two parties agreed to much less on both fronts.
Concessions: Along with suspending the debt limit for about four months, Congress passed a “no budget, no pay” plan, barring lawmakers from getting paychecks if they didn’t pass a budget by mid-April of that year.
How close? The deal came together just weeks before Treasury was expected to default.
Ceiling at the time: $14.3 trillion
How it went down: With its vivid imagery of a “fiscal cliff,” this standoff is remembered as the most economically devastating debt limit brawl in U.S. history thus far. It also marked Republicans’ biggest win on demands for new spending controls. And two familiar faces are credited with saving the day: then-Vice President Joe Biden and McConnell, who was Senate minority leader at the time.
While Obama and then-House Speaker John Boehner sealed the final deal, Biden’s longtime connection with McConnell led to the breakthrough, according to lawmakers, congressional staff, administration aides and Democratic officials familiar with the talks.
After the House speaker rejected an initial spending-cuts plan, McConnell paused talks with Biden, giving Boehner breathing room to appease his caucus with an attempt to pass their own debt-limit plan (it failed). Then, when the time was right, McConnell dialed up Biden with an idea for a workaround — and it worked.
Still, the Republican majority in the House wasn’t united enough to carry the vote alone, and GOP leaders called for help across the aisle. Then-House Minority Whip Steny Hoyer (D-Md.) and then-Minority Leader Pelosi swallowed their objections to the plan and whipped their own as the vote remained open. The final House count: 174 Republican ayes, 66 Republican nays. Democrats split evenly, 95 on each side.
Concessions: The deal created a decade of spending caps for both military and non-defense programs, with the aim of saving more than $900 billion over that time. It also set up the threat of across-the-board cuts. The Pentagon, domestic programs and Medicare would all face the chopping block if Congress didn’t act to prevent that slashing.
How close? The talks got so intense and dragged on so close to the brink of default that the Standards and Poor’s credit rating agency downgraded the nation’s status as a borrower — the only time the U.S. has lost its A+ badge as a firmly trusted debtor. Even rumors of a downgrade that year caused the Dow Jones Industrial Average to swing by more than 400 points.
Just before the final deal came together, Obama privately braced for the possibility that then-Treasury Secretary Tim Geithner would need to prepare the country for a market crash.
Ceiling at the time: $12.4 trillion
How it went down: In another echo of the current debt fight, fiscal conservatives made it tough that year to rally enough votes to raise the borrowing limit. But back then, in the pre-Tea Party era, it wasn’t Republican conservatives causing the most trouble — it was Democrats of the Blue Dog persuasion pushing hardest for spending restraint.
Democrats controlled Congress and the White House, and still it took them weeks of negotiations among their own party leaders to lock in a deal that narrowly cleared both the House and Senate.
Coming off the so-called Great Recession, then-President Obama and congressional leaders were prepared for years of red ink amid waning tax revenue. And moderate Democrats were demanding new fiscal controls.
Democratic leaders even called on former President Bill Clinton, nearly a decade after his tenure in the White House, to sell the caucus on the idea that new spending restrictions would remind voters their party “had a better record on fiscal discipline” than the GOP. Biden, as the lead proxy for Obama, worked his Senate ties.
Following Senate passage, without a vote to spare, then-Speaker Pelosi whipped alongside House Blue Dog leaders, prevailing 217-212 to raise the debt limit despite 37 defections.
Concessions: The deal reinstated “pay-go” budget rules similar to those credited with helping rein in deficits in the 1990s. Obama heralded the restraints, describing them as “a simple but bedrock principle: Congress can only spend a dollar if it saves a dollar elsewhere.”
To win over moderates in the Senate, including then-Budget Chair Kent Conrad (D-N.D.), Obama also promised to create an 18-member fiscal commission to recommend more steps to reducing the deficit.
How close? Federal debt could have exceeded the limit in less than a month if Congress hadn’t acted then.
Nancy Vu and Beatrice Jin contributed to this report.
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( With inputs from : www.politico.com )