The 'Tricky Politics' of the Debt Ceiling Negotiations

( Manuel Balce Ceneta / AP Photo )
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Brian Lehrer: It's The Brian Lehrer Show on WNYC. Good morning, everyone. Hope you had a great weekend. If the TV writers' strike was in shutting down the late-night talk shows, they'd have some great material for tonight. Vladimir Putin's latest front in the invasion of Ukraine is apparently to ban Stephen Colbert, Jimmy Kimmel, and Seth Myers, all three of them, from entering Russia. That'll keep those F-16s from shooting down Russian bombers, right? To be clear, it's not just Stephen Colbert, Jimmy Kimmel, and Seth Myers.
It's also MSNBC hosts Joe Scarborough and Rachel Maddow, CNN host Aaron Burnett, who reported from Ukraine at the beginning of the war. Oh, also, former President Barack Obama, just for good measure. New York State Attorney General Letitia James. How'd she get in there? The only connection seems to be that James is investigating Putin's BFF, Donald Trump, who praised Putin yet again, in case you missed it, in that recent CNN town hall.
Another Putin-Trump connection there is that Russia now also banned from entering their country any officials engaged in what they called persecution of dissidents. What does Russia mean by persecution of dissidents? The prosecution of people over the January 6 Capitol riots. Who needs a Robert Mueller-style Russia investigation to determine who's helping who at electoral politics, right? There you go. Funny. Not funny. It might be funny if it wasn't to somehow help colonize Ukraine and kill Ukrainians.
Russia on Friday banning Stephen Colbert, Jimmy Kimmel, Seth Myers, and 497 other people from doing something they probably don't want to do anyway, go to Russia. Meanwhile, this country has its own challenge right now. Here we are on May 22nd. Remember what Treasury Secretary Janet Yellen said at the beginning of this month?
Janet Yellen: Well, I indicated in my last letter to Congress that we expect to be unable to pay all of our bills in early June, and possibly as soon as June 1st, and I will continue to update Congress, but I certainly haven't changed my assessment. I think that that's a hard deadline.
Brian Lehrer: We are at about default minus 10 days. President Biden cut short his long-planned foreign policy trip to Asia this weekend to come home to meet with House Speaker Kevin McCarthy today. That meeting will be this afternoon. We will talk mostly now about what policies that countdown clock might force, for better or worse, with New York Times congressional correspondent, Catie Edmondson. Catie, thanks so much for coming on today. Welcome to WNYC.
Catie Edmondson: Thanks for having me, Brian.
Brian Lehrer: Before we get to domestic stuff, any congressional reaction you can discern yet to Vladimir Putin banning some members from both parties as well as TV comedians from entering his blessed country?
Catie Edmondson: Well, this is not unusual for members of Congress. The Kremlin has, over the past several years, intermittently put out these types of bans. Typically, you actually see lawmakers in both parties wear it really. It's a badge of honor. They say that this shows that they're standing up to the Kremlin. We actually saw a few lawmakers taking victory laps over the weekend that they will not be permitted to enter Russia.
Brian Lehrer: On the debt ceiling default clock countdown you reported that Speaker McCarthy announced today's meeting yesterday sounding more sanguine about a deal between him and Biden to avoid default on the nation's debt. Sanguine in what way?
Catie Edmondson: Well, it was really a week of whiplash. When we looked back to the meeting that Speaker McCarthy had with President Biden last week, there seemed to be glimmers of hope. They emerged from that meeting saying that they were optimistic they were going to be able to reach some deal. Speaker McCarthy actually told us at the Capitol last week that he thought maybe they could even have a deal in principle, in hand by the weekend, and then we got to this weekend and talks really faltered. The White House, House Republican negotiators traded proposals and the negotiations stopped.
Essentially, they began trading accusations over whether each side was backtracking on negotiations, and so, as of Saturday night, we were in a pretty bad place considering that we are working against this June 1st deadline.
When Speaker McCarthy came out of his office yesterday after speaking on the phone with President Biden, he again sounded significantly more upbeat than he had the day before. Obviously, there's a lot of back and forth here, and we're working with incremental updates at this point, but heading into this meeting, it certainly seems that at least Republican negotiators are striking a more optimistic tone than, say, 48 hours ago, and obviously, time is of the essence right now.
Brian Lehrer: You report that three sticking points in the negotiations are a cap on federal spending, new work requirements for recipients of antipoverty programs, and funding meant to help the IRS crackdown on tax evasion by high-income corporations and individuals. Catie, can I take that last one first? If the country has a debt problem, should I assume the Republicans are very gung ho to crack down hard on wealthy tax evaders?
Catie Edmondson: Well, this has actually been a central piece of legislation that the President passed, signed into law last year that Congress, the Democrats passed before Republicans took the House back, that Republicans have been extremely eager to curtail, to try to pull back, claiming that it amounts essentially to federal overreach. I actually think, Brian, that that is going to be one of the first issues that gets dispensed with.
The central issue at play here, really, is to what extent negotiators decide to ultimately cap federal spending, how much money the government spends on programs, excluding Medicare and Social Security, every year. We heard that directly from Speaker McCarthy's lead negotiator, a congressman from Louisiana named Garrett Graves, who yesterday told us, "Look, the numbers are foundational here, and our red line, essentially, is that we have to get the President to commit to spending less money this coming year than we did last year."
Brian Lehrer: Just to put a finer point on two of the three things that you listed as the sticking points, clarifying combining the Republicans' lack of interest in cracking down on high-income tax evaders with the other demand about the anti-poverty program recipients. They want to be tougher on poor people who qualify for government assistance, but easier on rich people who evade their taxes?
Catie Edmondson: What they've said is that they have absolutely no interest in trying to create new taxes, especially for those high earners that President Biden put forward as a solution to if you want more revenue, here's a way to do it. Their claim is that this is not a revenue problem, it's a spending problem. We've heard Speaker McCarthy say that over and over again. Where that has left them then is trying to find cuts to other programs. As you said, Brian, where they have really focused on so far is, again, trying to make cuts to programs that help the needy, help people who are sick, help people who need a little extra help getting food on the table. We're looking at potentially cuts to a program called the Temporary Assistance for Needy Families program. There's also discussion about making cuts to certain benefits for Medicaid recipients and recipients of food stamps.
Brian Lehrer: If they're now emphasizing, as you say, a total cap on federal spending, if the Democrats who are in power want to take that out of the Pentagon, let's say, instead of poor people's pockets, could they do that and be within what McCarthy is demanding?
Catie Edmondson: Well, that's a really interesting question because I think it would depend on who in the House Republican Conference that you would talk to. I actually think there are some members of the hard right Freedom Caucus, for example, who would actually say that they think there is room to make cuts to Pentagon spending, but when you look at the people who are actually negotiating this deal, what they have told White House negotiators is that they want to actually increase the Pentagon's budget year over year.
That's likely to please the hawkish, the traditionally hawkish lawmakers in their conference. What that would necessitate, of course, if you're calling for an overall cut to spending, but you want to increase military spending is, of course, all those other programs that we've been talking about, education programs, health care programs, those would see an even starker cut.
Brian Lehrer: Medicaid recipients would get less. According to most Republicans, the Pentagon would get more, and cracking down on wealthy tax evaders isn't on their agenda, just clarifying. What about Biden? Is he negotiating specifics in public like that? Does he want to undo some of the Trump tax cuts for the wealthy or anything else specific?
Catie Edmondson: No. President Biden publicly has kept his really focus to saying, "Look, this country has never defaulted on the debt, and we simply cannot do that right now." He publicly chastised Republicans over the weekend in what was kind of a rare moment of him rebuking the Republicans that he's negotiating with, and saying, "Look, it's crazy that you guys are saying that we need to cut spending here yet you won't accept any new taxes." At the same time, I think both sides here understand that it is imperative that they get to a deal. We really saw, I think, both House Republican negotiators and President Biden turned down the temperature on their rhetoric.
I will say, though, as an aside, looking at President Biden's comments last week, he was very careful in how he was discussing work requirements that Republicans so desperately want. He said essentially that he was not going to accept any changes "of consequence," that he did not want to see new work requirements targeting people who are sick, who are unhealthy. That's getting to that Medicaid aspect, but he notably left the door open on other programs, such as food stamps, and that caused a lot of ire among the progressives in his party. He is certainly giving himself some room to negotiate here. He's facing some pushback from his left flank as a result of that. We're going to have to see how these meetings continue to play out.
Brian Lehrer: The politics on the other side of the aisle for McCarthy, political analysts are saying, he actually risks losing his speakership to a more hardline Republican if he doesn't get enough out of Biden in these talks. Can you describe who's putting what kind of pressure on McCarthy in his own Republican ranks?
Catie Edmondson: Well, just as President Biden is facing pressure from progressives not to give too much to Republicans, Speaker McCarthy is also facing a great deal of pressure from his right flank, from namely the Freedom Caucus, who has said that they have to see large cuts in spending. Some of the members of the Freedom Caucus actually were trying to get new proposals that just immigration placed on the negotiating table. They are really concerned essentially, that Speaker McCarthy could end up accepting a compromise that does not cut federal spending as much as they want.
One of the reasons this is particularly important is if you remember the 15 rounds of votes that Speaker McCarthy had to take at the beginning of this year, in order to get the speaker's gavel, one of the concessions he made at the time was that any one lawmaker can call to begin to try to oust him as speaker if they're displeased with something he has done. That is the tightrope that he is walking here. He, one, needs to make sure he gets enough votes from his conference to be able to get a deal over the finish line to prevent us from defaulting potentially by June 1st. At the same time, he also has a political imperative to try to protect himself from being ousted by an angry member of the right flank.
Brian Lehrer: Now, to be clear, historically, and I think most of the listeners to the show know this, the debt ceiling is just the authority to borrow enough money to pay the debts that the US has already incurred. That's different from the budget, which is the annual spending plan. What McCarthy is trying to do is link the two things, and Biden wants to keep them separate because defaults shouldn't be a negotiating tool for the budget. That's Biden's position.
Historically, when there were Republican presidents, like Trump, who increased the debt with his tax cuts, and Bush who increased the debt for other reasons, the Republicans don't try to link the budget to the debt ceiling, but when there's a Democratic president, they do. It happened with Obama. Now it's happening with Biden.
Another wrinkle here that I want to end on is that if Biden wants to play a certain high-stakes hardball, like the Republicans are playing high-stakes hardball with default, he can try invoking an aspect of the 14th Amendment to the Constitution and avoid congressional politics over the debt ceiling altogether, at least theoretically. I'll play a clip of the president on that in a second. Listeners may be thinking, "Wait, I know the 14th Amendment. That's the post-slavery one with the Equal Protection Clause. What does it have to do with the debt ceiling?" What does it have to do with the ceiling?
Catie Edmondson: That's right. I think a lot of people are realizing that there's actually quite a bit in the 14th Amendment that a lot of us just were not aware of. In this case, this theory that President Biden could try to invoke the 14th Amendment to avert a default comes down to a specific clause that was adopted after the Civil War that stipulates that the validity of the public debt issued by the United States government shall not be questioned. The idea of this is that the limit is constitutional and that President Biden could effectually try to invoke the 14th Amendment and say, "Look, you can't question the validity of our public debt. That's what a default would do, therefore, we're simply going to continue paying our bills."
This is a legal theory that's relatively novel. If President Biden and the White House were to try to do that, it likely would be challenged in a court of law somewhere, but it would be essentially a challenge to the very existence of the debt ceiling.
Brian Lehrer: Here's Biden, at a press appearance last week, saying yes to the concept, but not really.
President Biden: I have been considering the 14th Amendment. A man I have enormous respect for, Larry Tribe, who advised me for a long time, thinks that it would be legitimate, but the problem is it would have to be litigated. In the meantime, without an extension, it would still end up in the same place.
Brian Lehrer: It would be challenged in court, but why is Biden ruling that out as a short-term tactic, rather than avoid default for now, by invoking the 14th Amendment, dare the Republicans to take it to court, and when they do, let the court sort it out?
Catie Edmondson: Well, that is a question that a lot of progressives are asking. We have seen a great number of liberals in the Democratic Party urge the President to say, "Look, we know that this is a path that no president has ever gone down before, but this is an extraordinary occasion, you're dealing with people who simply can't be negotiated with, you should invoke 14th Amendment." Clearly, the President is receiving some sort of counsel from his advisor saying that that is potentially not the best or the most viable solution here. I think there are probably questions because that would be challenged legally. Whether it would do anything to protect the markets from tanking even if we go into default with him trying to invoke the 14th Amendment, but at the end of the day, it leaves us with President Biden at the negotiating table with Speaker McCarthy.
Brian Lehrer: There they are meeting today default deadline, approximately June 1st, according to the Treasury Secretary. Catie Edmondson, congressional correspondent for The New York Times. Thanks for coming on, and explaining so much.
Catie Edmondson: Thanks so much.
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