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Tag: debt

  • Tracking Kevin McCarthy’s promises to GOP critics as debt ceiling fight looms

    Tracking Kevin McCarthy’s promises to GOP critics as debt ceiling fight looms

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    It was one of House conservatives’ biggest demands: more representation on key committees and in senior roles. They got both, and they’re still bragging about it.

    At a House Freedom Caucus fundraiser in Tennessee last month, the conservative group’s chair Rep. Scott Perry (R-Pa.) boasted to donors about what it extracted from McCarthy. That included gaining the Homeland Security Committee gavel for a group member after securing Rep. Jim Jordan’s (R-Ohio) eventual chairmanship of the House Judiciary Committee (he first served as the top Republican on the House Oversight panel).

    Jordan’s position, Perry claimed at the event, was based on “leverage, too.” In reality, though, that position had long been expected given Jordan and McCarthy’s increasingly close relationship.

    Rep. Mark Green (R-Tenn.), a member of the Freedom Caucus who was present at the event, now chairs the homeland security panel after the protracted speakership battle.

    “Now we knew we were going to have a dog in the fight … we also knew the competition,” Perry said of the homeland chairmanship race – apparently referring to Rep. Dan Crenshaw (R-Texas) — according to an audio recording obtained by POLITICO.

    “And one of the conversations was: If that other person becomes the chairman of the Homeland Security Committee, then you will not be speaker.”

    While the GOP Steering Committee mostly decides panel chairs, the process is heavily influenced by the speaker. (Green’s position, as well as other competitive chair positions, were decided by the Steering panel after McCarthy’s election on the floor.) Green’s allies have argued that his win was more than just a tradeoff, saying it was a win-win given his resume and vision for the panel. A Crenshaw aide, responding to Perry’s words, called the apparent deal the “worst kept secret in Washington.”

    Additionally, two of the GOP’s most conservative members — Reps. Chip Roy (R-Texas) and Thomas Massie (R-Ky.) — were placed on the lower-profile but powerful Rules Committee. It was perhaps the most decentralizing move McCarthy made; the Rules panel decides exactly the way legislation comes to the House floor, empowering Roy and Massie to block certain bills or push for changes.

    Conservatives gained more representation on other key committees, too. Two of the 20 holdout members landed on the Financial Services panel and two others got seats on Appropriations. And even Freedom Caucus members who were supportive of McCarthy landed on other top panels, like Rep. Randy Weber (R-Texas), who received a spot on Energy and Commerce.

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    ( With inputs from : www.politico.com )

  • Debt ceiling fight heads to battleground NYC suburbs

    Debt ceiling fight heads to battleground NYC suburbs

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    As both parties gaze toward a tumultuous 2024 election cycle, the president’s visit is already putting the Hudson Valley’s moderate Republicans, who narrowly won a handful of toss-up seats six months ago, back on the defensive. The economic tremors associated with a busted debt ceiling could be felt quickly by their constituents.

    “It’s exactly the wrong message,” Rep. Marc Molinaro, a Republican who won New York’s 19th District, said in an interview.

    “I think most Americans see the highest rate of inflation in 40 years, the debt crisis, spending crisis and a border crisis. And the president’s hopping on Air Force One to go siphon campaign dollars out of New York City, and then deliver partisan speeches in the marginal congressional districts. Frankly, there’s plenty of time for that. Right now, he ought to be engaged in negotiation on any one of those fronts.”

    Biden and congressional leaders in both parties met late Tuesday to see if they could reach a compromise, but it appeared no progress was made.

    Both he and Republican Rep. Mike Lawler pointed to Biden’s focus on negotiations — rather than campaign rhetoric — for similar crises when he was senator and then vice president.

    “So it’s a little surprising to see the tact that he has taken, frankly, throughout this process,” Lawler, who flipped New York’s 17th District by fewer than 2,000 votes, said in an interview Tuesday.

    “My position is one that I think most Americans would agree with,” Lawler continued. “Americans elected a House Republican majority to serve as a check and balance on the Biden agenda. And so they expect that there’s going to be a give-and-take. We don’t live in a dictatorship or a monarchy. And, and there needs to be compromise. And both sides need to be willing to give.”

    But Biden’s visit is not surprising to New Yorkers watching the scramble that ensued after November’s bruising results, and it won’t be surprising to see the president and other top Democrats return to Hudson Valley again and again, said Democratic strategist Jon Reinish.

    “I think that both parties regard the Hudson Valley — of all places — as the sort of political epicenter,” Reinish said. “It’s where [House Speaker Kevin] McCarthy made his majority, with a series of unlikely wins, but it’s also where his majority is the most fragile, and if you’re the White House, and if you’re President Biden, you’re going to seek to exploit that.”

    The issue’s partisan nature may serve to push lawmakers like Molinaro and Lawler toward more centrist positions relatively early in the reelection campaign.

    “2024 is coming down the pike really, really fast,” Reinish said. “And Lawler certainly knows that whichever Democrat runs against him is going to be extremely well funded and is going to go after him for any out of the mainstream radicalization and try to tie the rest of a faraway Republican House around him. So if I’m Lawler, I’m going to try to disarm whoever is going to be my opponent from those talking points.”

    The two Hudson Valley Republicans will be targeted by Democrats next year, along with the four seats on Long Island that the GOP swept. Biden and his surrogates made a series of stops in the region last fall to help Democrats, including the then-troubled campaign of Gov. Kathy Hochul, who was able to pull out a narrow win.

    Molinaro shrugged off the idea that the spotlight on the region would alter his or his colleagues’ positions in the near or distant future.

    “At the end of the day, the public — your voters — will reelect you, if you’ve done an earnest and honest job,” he said. “I would say the president of the United States owes my voters, my constituents and every American the same honest earnest job of delivering on the compromise that’s necessary to ensure we do not default and that we don’t continue to spend and mortgage away our kids’ futures.”

    Lawler said he welcomes Biden to his district and looks “forward to being there to hear his remarks.” Molinaro will not.

    “I will be working on Wednesday, in Washington, D.C.,” Molinaro said, pointedly.

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    ( With inputs from : www.politico.com )

  • Biden says he’s exploring 14th amendment to defuse debt ceiling standoff

    Biden says he’s exploring 14th amendment to defuse debt ceiling standoff

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    “I said I would come back and talk,” he said. “The one thing I’m ruling out is default, and I’m not going to pass a budget that has massive cuts.”

    The president’s remarks came at the White House shortly after a meeting he called “productive” with House Speaker Kevin McCarthy and the three other top congressional leaders. But Biden leveled criticism at McCarthy for sometimes making remarks during the meeting that were “maybe a little bit over the top” and for not knowing what he had proposed in his GOP bill.

    “Three of the four participants [were] very measured and low key,” Biden said.

    Back at the Capitol, McCarthy laughed off the comment, saying: “If you ever spend time with [Senate Majority Leader Chuck] Schumer, you’ll find out who the fourth is.”

    On a more serious note, Biden warned that not everyone at the negotiating table pledged to avoid default.

    Among only “three of the five, there was substantial movement that everyone agreed that deficit — defaulting on the debt was off the table,” Biden said.

    The president is scheduled to meet again Friday with McCarthy, Schumer, Senate Minority Leader Mitch McConnell and House Minority Leader Hakeem Jeffries. Until then, White House staff and aides to the four congressional leaders would continue to hold discussions, those involved said.

    Biden is scheduled to leave for Japan in a week for the G-7 summit, but the president said he’d consider delaying his trip if an agreement appeared to be in reach. Underscoring the seriousness of the debt discussions, he called it “the single most important thing that’s on the agenda.”

    Canceling the trip, he said, is possible, but not likely.

    “In other words, if somehow we got down to the wire and we still hadn’t resolved this and the due date was in a matter of, when I was supposed to be away. I would not go. I would stay till this gets finished,” he said.

    White House and congressional appropriations staff are to begin discussions on a budget, which could form the outlines of an agreement. The Biden administration has insisted that the budget talks would be separate from a debt limit increase.

    Biden expressed openness to one key GOP ask: Rescinding tens of billions of dollars in Covid funding.

    “The answer is, I’d take a hard look at it,” Biden said, adding that the government “didn’t need it all” but needed to determine how much of that pot has been committed to various projects. “It’s on the table.”

    Still, Biden made clear that an agreement is not imminent.

    “There’s a lot of politics, posturing and gamesmanship and it’s going to continue for a while, but I’m squarely focused on what matters,” he added.

    Sarah Ferris and Adam Cancryn contributed to this report.

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    ( With inputs from : www.politico.com )

  • It could’ve been worse: White House debt meeting ends with plans for a repeat

    It could’ve been worse: White House debt meeting ends with plans for a repeat

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    Aides to the four party leaders in each chamber of Congress and White House staff will continue talks during the week, McCarthy said, and the players will convene again on Friday. Democratic leaders said separately that party leaders would begin discussing a possible budget and spending deal as soon as Tuesday evening — a step closer to pairing the debt limit with another major headache for party leaders.

    Yet neither party’s leaders even edged away from their entrenched positions on the debt limit: Biden and Senate Majority Leader Chuck Schumer said there’s nothing to negotiate. And McCarthy dinged Biden for being unable to articulate any spending cut he might consider as part of a deal to increase the Treasury Department’s borrowing power.

    Instead, the speaker reiterated that the House is the only chamber that has passed a bill dealing with the topic — a measure packed with conservative priorities that Biden’s party has rejected.

    Biden actually went further after the meeting, saying he was “considering” the use of the 14th amendment as a means to circumvent the debt ceiling standoff. But he cast some doubt on whether it could work, saying it would “have to be litigated, and in the meantime without an extension it’d still end up in the same place.”

    Deal-making senators in both parties, however, appeared irked by the lack of progress. Sen. Joe Manchin (D-W.Va.), who met with McCarthy himself and pressed Biden to negotiate, said he expected more.

    “To have five of the political leaders for our country walk out of the meeting and not one of them say that we made progress?” Manchin said. “Ridiculous.”

    Sen. Bill Cassidy (R-La.) said that whether the country defaults or not depends largely on Biden saving the day: “If the president shows leadership, I don’t think we’re going to default. If the president just kind of sits there and, you know, repeats the same thing over and over again, we’ve got an issue.”

    Despite that bleak result, Tuesday’s meeting ended as positively as anyone could have hoped for with a possible debt ceiling breach potentially a month or less away. After near-total silence since February between Biden and McCarthy, the two main negotiating partners, the duo is now set to meet twice in one week.

    As McCarthy returned to the Capitol after a week-long recess on Tuesday, the California Republican declared that party leaders should nail down the outlines of a deal in the next two weeks to ensure the U.S. doesn’t go careening off a fiscal cliff.

    “We now have just two weeks to go,” McCarthy said, offering little clarity on that timeline. While the Treasury Department has predicted the country could breach the debt limit as soon as June 1, the Senate is scheduled to leave Washington in just 10 days, with the House going on a separate recess the week of Memorial Day.

    Schumer described Tuesday as a “bad news and good news” meeting, blasting McCarthy for refusing to rule out default.

    McCarthy dodged reporters’ attempts to get him to promise the nation would make good on its debt, though Senate Minority Leader Mitch McConnell said pointedly: “The United States of America is not going to default.”

    Despite McCarthy suggesting a firm deadline and both parties pooh-poohing the idea of a short-term hike, it remains unclear how seriously negotiators are taking Treasury’s projections of a default as soon as June 1. It took the White House and congressional leaders a week to sit down together after that estimate, and some in Congress are privately wondering whether the debt limit won’t get dealt with until after the Memorial Day holiday.

    “I believe the Treasury secretary when she names the X-date,” House Financial Services Committee Chair Patrick McHenry (R-N.C.) said, referring to the department’s June 1 warning. “I think we have to be prepared to move in anticipation of that date being earlier in the month [of June].”

    McHenry, like McCarthy, said a short-term increase was off the table. But it may be difficult to negotiate a budget deal in time to avoid a debt ceiling breach without more breathing room.

    McConnell essentially backed McCarthy’s position during the meeting and the press availability afterward. Rather than raise alarms, he said the back and forth is normal and Washington is merely “having a debate here” on federal spending “in conjunction with raising the debt ceiling.”

    In the run-up to the meeting, the GOP hardened its position: 43 Republican senators signed on to a letter pledging to filibuster any bill raising the debt ceiling “without substantive spending and budget reforms.” McConnell signed onto that letter and has rhetorically locked arms tightly with McCarthy.

    Biden also has refused to budge from his opposition to negotiations on the debt ceiling. Democrats cite the 2011 debt limit crisis, and the spending cuts and credit downgrades that resulted from that era’s talks with the GOP, as an episode they are unwilling to repeat.

    “People have asked: Will the president give Speaker McCarthy an off-ramp, an exit strategy?” White House press secretary Karine Jean-Pierre said on Tuesday. “The exit strategy is very clear: do your job, Congress must act, prevent a default.”

    House Republicans had generally set low expectations for the meeting, given Democrats’ repeated insistence that they won’t entertain the GOP’s demands. One of the best scenarios possible, as they saw it, was simply that negotiators would agree to a second meeting.

    Some, however, are leaving it to McCarthy to decide what constitutes a win.

    “I’ll let him define that,” Rep. Tom Cole (R-Okla.), chair of the House Rules Committee, said of the speaker after McCarthy departed for the meeting.

    In the meantime, House GOP leaders have no plans to tee up any additional debt measures on the floor. Many privately feel that Biden has more to lose than Republicans, as his approval ratings teeter around 40 percent compared with McCarthy, whose conference has been in lockstep behind him.

    The Senate has not yet voted on the House’s bill or a clean debt ceiling bill introduced by Schumer.

    While both sides prepare to meet again, the parties are expected to keep duking it out in a messaging battle over who would shoulder the blame for the painful effects of a drawn-out debt crisis. That finger-pointing will only grow more tense as financial markets begin to respond to the specter of a potential default.

    The 2011 debt ceiling debacle, which stemmed from Tea Party Republicans pushing the Obama administration for steep spending cuts, ultimately resulted in a downgrade in the country’s credit rating — even after an 11th-hour deal to avoid a default.

    At the time, McConnell swooped in to work with Democrats and then-Vice President Biden to secure a plan they could all swallow. But he has stated clearly that won’t be the case this year: McCarthy is leading the charge this round.

    Adam Cancryn, Sam Stein and Nicholas Wu contributed to this report.

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    ( With inputs from : www.politico.com )

  • Feinstein returning to D.C. as debt limit fight heats up

    Feinstein returning to D.C. as debt limit fight heats up

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    Her travel back to Washington follows a conversation last week with Senate Majority Leader Chuck Schumer, in which she said she could return as soon as this week. It is not yet clear if Feinstein will participate in Tuesday night’s floor votes.

    “I’m glad that my friend Dianne is back in the Senate and ready to roll up her sleeves and get to work. After talking with her multiple times over the past few weeks, it’s clear she’s back where she wants to be and ready to deliver for California,” Schumer said in a statement Tuesday.

    Feinstein’s return will put two nominees in the spotlight, in part because Feinstein’s absence is not the only vote holding them up. Senate Democrats will now have to grapple with the nomination of Michael Delaney for the First Circuit, which has been held over in Judiciary for weeks and could face further problems on the floor. Delaney faces criticism, even from some Democrats, over his representation of a school in a sexual assault case.

    Feinstein’s vote could also be critical for Julie Su, President Joe Biden’s pick for Secretary of Labor. A handful of moderate Democrats, including Sens. Joe Manchin (D-W.Va.) and Jon Tester (D-Mont.) have declined to say whether they will support her on the floor. Any Democratic defections would make Feinstein’s vote even more critical in the 51-49 Senate.

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    ( With inputs from : www.politico.com )

  • Senate GOP leaders watch debt limit collide with their coveted farm bill

    Senate GOP leaders watch debt limit collide with their coveted farm bill

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    “They’re related for sure,” Thune said of the debt limit talks and farm bill. “For better or worse, pretty much everything that we’re going to do subsequent to the debt limit discussion depends on how all that plays out.”

    Fresh in Senate GOP leaders’ minds: The 2011 sequestration fight, which resulted in steep spending cuts to farm safety net programs popular among Republicans. One Senate GOP aide, who was granted anonymity to discuss internal discussions, warned that any “across-the-board cuts [included in legislation to raise the debt limit], may effectively reduce the investments we are able to make in the farm safety net, trade, research, and other priorities.” The person added that “debt ceiling negotiators need to use a scalpel, not an ax.”

    Thune and Sen. Joni Ernst of Iowa, the No. 4 Republican in the upper chamber, are now among the handful of GOP leaders navigating the debt talks with the White House and the upcoming budget negotiations while trying to protect key farm bill funding. Ernst acknowledged the three legislative efforts are becoming increasingly entangled. As a result, the farm bill timeline could slip.

    “We anticipate it’s going to take a while to get the farm bill done. Sooner is better than later, but it could take a little bit longer,” Ernst said.

    GOP senators are largely supportive of their House colleagues’ demand for cuts to nutrition spending, which ballooned during the pandemic. But they’re less enthusiastic about the idea of slashing key farm safety net programs they’ve long tried to protect.

    Sen. Chuck Grassley (R-Iowa) said that he expects Senate Republican leaders will likely need to step in to protect certain pots of farm bill funding from House GOP cuts given “the importance of agriculture to our entire economy.”

    While Senate GOP leaders haven’t drawn any redlines, Thune has noted the importance of the farm bill to the rural voters his party relies on. “I think the [House Republican] leadership … understands even though on their right they’ve been getting a lot of pressure to cut, cut, cut in different areas, there are also a lot of members from agricultural states who need a farm bill,” said Thune. That includes his own state, South Dakota, where agriculture is the largest industry.

    And, he pointed out, “If you look at our map in 2024, we got a lot of rural state Republicans who are up.”

    Up to this point, McConnell and Senate Republicans have deferred to House Republicans in the debt limit negotiations with the White House, even as the U.S. inches closer to the June 1 date when the nation could hit its debt limit, according to Treasury Secretary Janet Yellen. But McConnell will be attending a White House meeting Tuesday with Biden, House Speaker Kevin McCarthy and Senate Majority Leader Chuck Schumer, which members of both parties are hoping could help begin to break the logjam.

    Democrats, meanwhile, are warning that House Republicans’ proposals to slash spending as part of the debt limit deal threaten the viability of the traditionally bipartisan farm bill on Capitol Hill. Democrats are particularly incensed by the GOP push to expand work requirements for the Supplemental Nutrition Assistance Program — the nation’s leading anti-hunger program for low-income Americans, which accounts for approximately 80 percent of farm bill funding.

    Senate Agriculture Chair Debbie Stabenow (D-Mich.), who is also a member of Democratic Senate leadership, has warned the proposed spending cuts in the House GOP debt legislation would also hit key parts of the farm bill — including critical risk management programs for crop farmers that are still being impacted by the 2011 spending cuts.

    “If the Republicans want to tank a farm bill that’s up to them,” Stabenow said in an interview. “This is the most important rural economic development and farmer safety net in our country.”

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    ( With inputs from : www.politico.com )

  • Here’s who misses checks if the U.S. hits the debt brink in June

    Here’s who misses checks if the U.S. hits the debt brink in June

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    While its far from certain how, exactly, the Treasury Department would handle a default — including whether it would prioritize certain payments or delay paying the government’s bills — the think tank noted that about $50 billion in Social Security benefits are set to go out in the first half of June, in addition to more than $20 billion in payments to Medicaid providers, $6 billion in federal salaries, $12 billion in veterans benefits and $1 billion in SNAP benefits, also known as food stamps.

    And those hugely significant payments are just a few that could be affected, the Bipartisan Policy Center cautioned, and don’t represent an “exhaustive” list “of all cash flows on a particular day.”

    The Biden administration has already dismissed the untested idea of paying some bills but not others, arguing that it would be unfair to average Americans, cause widespread economic disruption and prove logistically impossible. A more likely scenario, in the event of a default, is that Treasury would choose to delay all bills, waiting until there’s enough revenue to cover all payments for any given day, the Bipartisan Policy Center said.

    The think tank’s new projection piles further urgency onto Tuesday’s debt limit meeting at the White House, despite slim prospects for a major breakthrough between Democrats insisting on a straightforward hike and Republicans pushing for major concessions in return for their debt votes. What remains unclear, though, is whether the Treasury Department can limp along paying the bills until June 15, when quarterly tax receipts would provide a cash infusion and likely stave off default through the end of next month.

    If Treasury can hold off a default until the end of June, it would be able to tap into about $145 billion in new “extraordinary measures,” buying the government a little more borrowing power into the summer. The coming weeks will offer more clarity about whether Treasury can make it to mid-June and give Congress and the White House a longer ramp to negotiate a debt limit deal, said Shai Akabas, BPC’s director of economic policy.

    “I still don’t think now is the time for panic, but it’s certainly time to start getting concerned,” Akabas said, noting that Treasury “is skating on very thin ice” next month due to low cash flows.

    The Treasury cash crunch that could cripple the U.S. economy in the coming weeks stems in part from a disappointing tax season, mixed with delayed tax filing deadlines for residents of states like California that sit in designated disaster areas, Akabas said.

    Other estimates that point to a potential debt catastrophe in early June also underscore that considerable variability in the X-date will remain — until perhaps just days before the U.S. would officially default — thanks to the often unpredictable nature of federal cash flows.

    After Yellen issued her warning last week, the independent Congressional Budget Office also said it sees “a significantly greater risk that the Treasury will run out of funds in early June.”

    Mark Zandi, the chief economist for Moody’s Analytics, told senators during a Budget Committee hearing on Thursday that the X-date could fall on June 8. He added that Yellen’s early warning of June 1 is also very possible, as is a “best case scenario” of Aug. 8.

    The distress signals from government and outside forecasters have done nothing to jumpstart talks between the White House, which is insisting on a “clean” debt limit increase, and Republicans, who are demanding spending cuts in exchange for lifting the borrowing cap. The Biden administration has refused to negotiate, vowing to keep government funding on a separate track.

    A number of Republicans aren’t feeling the pressure either, viewing Yellen’s early June projection as nothing more than a political ploy aimed at squeezing the GOP to swallow a clean debt hike. Akabas said Yellen’s warning is consistent with how the Bipartisan Policy Center is analyzing the situation, however, noting that “no risk is too small a risk to flag.”

    “Yeah, I don’t think she’s playing games,” Zandi concurred in an interview last week.

    Experts say that financial markets are starting to signal trouble ahead amid the debt standoff, particularly among yields in short-term Treasury securities, and that those cracks will only start to worsen as the country lurches closer to the limit. The U.S. is also at risk of another credit rating downgrade, a painful consequence of the debt ceiling standoff that gripped Washington more than a decade ago.

    Pressure from the markets is what may ultimately force action, Zandi said.

    “I don’t think lawmakers will act until they’re pushed to act by the stock market and the bond market saying, ‘If you guys don’t, this is what’s going to happen’,” Zandi said. “There’s going to be a lot of red on the screen, a lot of 401Ks are going to be diminished and there’s going to be a lot of angry people.”

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    ( With inputs from : www.politico.com )

  • Why McConnell and McCarthy locked arms on the debt crisis

    Why McConnell and McCarthy locked arms on the debt crisis

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    McConnell’s move helps McCarthy’s negotiating position — and perhaps just as importantly, it boosts his own standing within a Senate Republican conference that has shifted rightward, a lurch that sparked the first-ever rebellion against his leadership last fall.

    McConnell said Biden isn’t the first president he’s pushed to work with a House controlled by the opposing party.

    “This is the very same advice I gave Donald Trump after the Democrats took the House. It wasn’t the first thing on their mind to negotiate with Nancy Pelosi. But they did,” McConnell said. “My advice in private is the same as I’ve been saying publicly … quit wasting time here. And in the end, the deal will be made between McCarthy and Biden.”

    Five months ago, it was impossible to imagine the reserved McConnell on the same page with the chummy McCarthy. During Biden’s first two years in office, they split on everything from gun safety to infrastructure to the billions of dollars in Ukraine aid tucked into a bipartisan spending deal. McCarthy quickly moved to repair his relationship with Trump after the Jan. 6 Capitol riot, while McConnell never spoke to Trump again.

    Their rifts created deep tension between House and Senate Republicans, who at times seemed at polar ends of the GOP as McCarthy positioned himself to win the speakership and McConnell steered the party away from Trump. Democrats privately believe McConnell will jump in to help save the day on the fast-approaching debt deadline, but conservatives see him as joined with McCarthy “until hell freezes,” as Sen. Cynthia Lummis (R-Wyo.) put it.

    So when lawmakers get to the White House on Tuesday, expect McCarthy to do most of the talking for Republicans.

    Asked if she anticipated a quiet McConnell during their slated meeting, Sen. Joni Ernst (R-Iowa) replied: “Yes. He’s like: ‘I’m here to support McCarthy.’”

    As McConnell and McCarthy set up Tuesday’s meeting during separate phone calls with Biden, the two Republicans spoke several times to coordinate their message, according to a person with direct knowledge of their talks.

    Andrew Bates, a White House spokesperson, replied to questions about McConnell’s call with Biden by stating the administration does not comment on private discussions with congressional leaders. He added, however, that “avoiding default is a critical priority for our economy — one that presidents from both parties have acknowledged is non-negotiable.”

    Despite McConnell’s and McCarthy’s clear personality differences, Republicans argue that the two are more alike than not: Both are political animals focused on their legacies who maintain a close read on their party and members. McConnell drolly surmised that McCarthy “has an interesting set of players” to deal with in the House, from the conservative Freedom Caucus to moderates.

    McCarthy’s closest allies see his relationship with the Senate leader maturing. Financial Services Chair Patrick McHenry (R-N.C.) described “a better line of communication now. And that has made a big difference.”

    “Where the McConnell and McCarthy teams have come to an understanding is first with communication — better communication — and a mutual recognition of their different challenges,” McHenry said.

    And Rep. Andy Barr (R-Ky.), who once interned for the Senate Republican leader, recalls a longtime McConnell-ism: that being a Senate leader is “kinda like being the undertaker at a cemetery.”

    “You’re over everyone, but nobody’s listening,” Barr recounted, describing McConnell as “empathetic to Speaker McCarthy’s job, which is also about the difficulty of bringing together a lot of independent-minded people.”

    The duo is converging on the crucial issue of Ukraine aid, too, following a rocky stretch. After McCarthy rebuked a Russian reporter over the war during an overseas trip, McConnell even took to the Senate floor to praise the Californian.

    Scott Jennings, a Kentucky-based GOP strategist and longtime McConnell confidante, said that gesture was a sign of “respect and support.”

    McConnell has navigated past fiscal fights where the political odds looked stacked against him, but Republicans who are close with both leaders say that mutual destruction would result if he steps out of line with McCarthy now. In fact, McCarthy could lose his gavel, causing chaos in the House, if McConnell were to negotiate a side deal with Democrats.

    “Whether it’s political ideology or pure pragmatism, [Senate leaders] recognize that a deal that’s not good with House conservatives is not making it through,” said first-term conservative Sen. J.D. Vance (R-Ohio).

    McCarthy’s House already passed a package of blunt spending cuts coupled with a one-year debt ceiling increase that Republicans are using as leverage against Democrats who vow they’ll only accept a straightforward hike. Tuesday’s meeting with Biden, McCarthy, McConnell, Senate Majority Leader Chuck Schumer and House Minority Leader Hakeem Jeffries will be this spring’s first tangible move to break the deadlock.

    “If there is a path forward, it’s going to require serious and swift cooperation with Sens. Schumer and McConnell, Leader Jeffries and Speaker McCarthy. And that’s partly why I think there’s so much anxiety about the possibility of default,” said Sen. Chris Coons (D-Del.), a close Biden ally.

    Republicans are almost universally insistent that, in light of the House GOP’s passage of its plan, the next step is Biden’s to take. They’re feeling especially confident after McCarthy proved he could corral his party, with only a handful of votes to spare, in favor of raising a borrowing limit that many promised never to touch.

    McCarthy may feel a squeeze if the Democratic-controlled Senate sends back its own legislation, but that would require nine or more GOP votes to break a filibuster.

    Despite the growing McConnell-McCarthy warmth, House conservatives still harbor strong suspicion of the Senate GOP leader due to his opposition to Trump and support for multiple bipartisan bills last Congress. That group of McConnell skeptics includes some of the same members who initially blocked McCarthy’s path to the speakership.

    “Nothing McConnell does surprises me; his actions are against everything [and] everyone who promotes conservatism,” Rep. Ralph Norman (R-S.C.) wrote in a text message.

    Others in the bloc of 20 who voted against McCarthy during the speaker race, such as Reps. Chip Roy (R-Texas) and Matt Gaetz (R-Fla.), bashed McConnell in the wake of the Senate’s approval of a $1.7 trillion spending bill in December. In light of that display, some Senate Republicans also believe it’s McCarthy turn to take arrows for cutting a tough deal, according to one person familiar with the Kentucky Republican’s thinking.

    McConnell was blunt in seeing no upside to working with Biden on a side agreement, even after steering his party out of similar debt ceiling impasses just two years ago.

    Any such accord with the president, McConnell said in the interview, “would produce nothing. Because the House of Representatives is not going to pass a bipartisan debt ceiling deal negotiated, presumably, with Joe Biden and Chuck Schumer.”

    So does McConnell have any advice for McCarthy on future negotiation with Biden, whom McConnell served with for decades?

    “[McCarthy] doesn’t need any advice from me about how to handle himself. I just think that the solution here is so obvious,” McConnell said. “This is going to be decided when the speaker and the president reach an agreement.”

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    ( With inputs from : www.politico.com )

  • No good options if Congress fails to raise the debt limit, Yellen says

    No good options if Congress fails to raise the debt limit, Yellen says

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    biden 38040

    Once that date hits, “really that’s it,” Yellen said on “This Week.” “We have been using extraordinary measures for several months now, and our ability to do that is running out.”

    The debate over the debt limit has left Democrats and Republicans in a deadlock, and so far neither side seems ready to budge. House Minority Leader Hakeem Jeffries said Sunday on NBC’s “Meet the Press” that Democrats are in “lockstep” with Biden, who has called for passing a clean debt ceiling, not tied to any of the spending cuts House Republicans proposed in the bill they passed last month.

    Speaking on Fox News’ “Sunday Morning Futures With Maria Bartiromo,” Sen. Mike Lee (R-Utah) said a letter had been sent to Senate Majority Leader Chuck Schumer saying 43 Republicans backed House Republicans in saying they would not consent to passing a debt ceiling increase without “spending cuts and structural budget reform.” He said he expects Senate Republicans to stay united on the issue.

    “As Kevin McCarthy, speaker of the House, meets with the White House, it’s imperative that he arrive in a position of negotiating power,” Lee said.

    Should Congress fail to come to an agreement before the X date, some analysts have suggested that Biden could invoke the 14th Amendment, which confirms “the validity of the public debt,” to raise the ceiling unilaterally. Legal scholar Laurence H. Tribe wrote of that option in the New York Times on Sunday: “For a president to pick the lesser of two evils when no other option exists is the essence of constitutional leadership, not the action of a tyrant.”

    But it’s an option Yellen doesn’t want to White House to have to consider.

    “Look, all I want to say is that it’s Congress’s job to do this,” she said. “If they fail to do it, we will have an economic and financial catastrophe that will be of our own making and there is no action that President Biden and the U.S. Treasury can take to prevent that catastrophe.”

    If Congress does fail to find common ground, “there are simply no good options,” Yellen said.

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    ( With inputs from : www.politico.com )

  • Senate Republicans will stand firm on debt ceiling, Mike Lee says

    Senate Republicans will stand firm on debt ceiling, Mike Lee says

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    The letter, which was sent to Senate Majority Leader Chuck Schumer, said Senate Republicans backed House Republicans in supporting “spending cuts and structural budget reform as a starting point for negotiations on the debt ceiling.”

    Democrats have a slim majority in the Senate but not enough to prevent a Republican filibuster on legislation.

    “Whenever you’ve got 41 senators who are unwilling to bring debate to a close on any legislation, it cannot pass. We’ve now got more than enough to stop exactly the kind of legislation that Joe Biden wants,” he said to Bartiromo.

    Lee added: “What that means is that the White House is going to come to the table and enter into real talks with the House Republicans, starting with Speaker Kevin McCarthy,” Lee said.

    House Republicans passed legislation on April 24 that would allow for the debt ceiling to be raised but which would also attempt to put the brakes on federal spending in the future, as well as roll back or cut specific programs. The vote was 217-215.

    Biden and other Democrats have said they are open to budget negotiations but want the debt ceiling treated as a separate issue, as it has been in the past. The expectation is that the the federal government will bump up against the debt ceiling at the start of June.

    Bartiromo asked Lee if he was confident that McConnell and other Senate Republicans would stand firm. Lee said he expected they would.

    “Even if we lost one or two here or there, we’d still be fine,” Lee said, “and I don’t think we’re going to the lose any of them.”

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    ( With inputs from : www.politico.com )