Debt Ceiling Negotiations Continue

With the U.S. approaching its debt ceiling as early as June 1^st, President Biden and Congressional leaders have accelerated negotiations to avert a default. As Biden attends the G7 meetings in Japan, he has delegated negotiating powers to a team of senior advisors.  Both Biden and McCarthy have drawn red lines on their positions: Biden and his top economic aids have instructed negotiators to “resist extreme attempts to take health care away from Americans”.  McCarthy and Congressional Republicans have made clear that a “no strings attached” debt ceiling bill will not pass.  Despite the distance between the two positions, both Biden and McCarthy have signaled optimism about reaching a deal, and they have both signaled willingness to compromise.  One of the issues potentially impacting the upcoming Farm Bill is the Republican proposal to add stricter work requirements for nutrition program participants.  While Biden has specifically stated his opposition to work requirements for health programs, it is unclear whether he would be willing to go along with strong work requirements for nutrition.

While the leaders of the two parties seem to be in a deal making mood, their respective colleagues are showing hesitancy.  Congressional Democrats are worried that Biden is “caving” to McCarty’s demands.  Some are pushing the president to use the 14^th amendment to declare the debt ceiling unconstitutional, and in the House their discharge petition reached 210 signatures.  If it reaches the 218 votes needed to pass, it will force a no-strings attached debt ceiling vote on the house floor without the approval of the Speaker.  On the other side of the aisle, Republicans in the Freedom Caucus have called for no more negotiations until the Senate passes the Republican Limit, Save, Grow Act, which passed in the House in April.  The parties will continue their negotiations with urgency to avoid the nation’s first ever default.