President Joe Biden with Speaker Kevin McCarthy
President Joe Biden meeting with Speaker Kevin McCarthy in the Oval Office on May 22nd, 2023 (Photo: The White House)

The White House announced late Sat­ur­day night that it has reached a deal with Kevin McCarthy and his deputies in the Unit­ed States House of Rep­re­sen­ta­tives to avert a fis­cal cri­sis that Repub­li­cans have been enthu­si­as­ti­cal­ly pre­pared to man­u­fac­ture by refus­ing to pro­vide the votes need­ed to raise the debt ceiling.

The debt ceil­ing, as read­ers like­ly know, is a mech­a­nism need­ed to reau­tho­rize already autho­rized spend­ing if that spend­ing would exceed a pre­de­fined statu­to­ry lim­i­ta­tion. It is an anti­quat­ed and unnec­es­sary fis­cal lever that serves no use­ful pur­pose for the coun­try. But Repub­li­cans love it, because when a Demo­c­rat is in the White House and they con­trol a cham­ber of Con­gress, they can use it to extort destruc­tive cuts to the nation’s essen­tial pub­lic services.

Repub­li­cans made it clear even before the last Con­gress fin­ished its work that they would be pre­pared to take all of us as hostages again should they get the oppor­tu­ni­ty, in order to force their Norquis­t­ian agen­da on the coun­try and make Democ­rats own its imple­men­ta­tion. Democ­rats could have tak­en away their lever­age by scrap­ping the debt ceil­ing alto­geth­er before los­ing their House major­i­ty, but they did­n’t, which was a huge mistake.

The Biden team in the White House ini­tial­ly respond­ed to Repub­li­cans’ ran­som demands by call­ing for a clean debt ceil­ing bill to be passed and refus­ing to begin the process of capit­u­la­tion. More recent­ly, how­ev­er, the White House has been “nego­ti­at­ing” to reach a “deal” with McCarthy that might or might not be able to pass the House of Rep­re­sen­ta­tives. The White House has not released the specifics of the deal yet, but of course they’re leak­ing out anyway.

The New York Times char­ac­ter­ized the specifics as follows:

The deal would sus­pend the bor­row­ing lim­it, which is cur­rent­ly $31.4 tril­lion, for two years — enough to get past the next pres­i­den­tial election.

Accord­ing to a per­son famil­iar with the agree­ment, it also would impose new work require­ments for some recip­i­ents of gov­ern­ment aid, includ­ing food stamps and the Tem­po­rary Assis­tance for Needy Fam­i­lies pro­gram. It would place new lim­its on how long cer­tain recip­i­ents of food stamps — peo­ple under the age of 54, who do not have chil­dren — could ben­e­fit from the pro­gram. But it also would expand food stamp access for vet­er­ans and the home­less, said the per­son, who spoke on con­di­tion of anonymi­ty because they were not autho­rized to dis­cuss details of the package.

The ten­ta­tive deal also claws back some unspent mon­ey from a pre­vi­ous pan­dem­ic relief bill, and reduces by $10 bil­lion — to $70 bil­lion from $80 bil­lion — new enforce­ment fund­ing for the I.R.S. to crack down on tax cheats. It includes mea­sures meant to speed envi­ron­men­tal reviews of cer­tain ener­gy projects and a pro­vi­sion meant to force the pres­i­dent to find bud­get sav­ings to off­set the costs of a uni­lat­er­al action, like for­giv­ing stu­dent loans — though admin­is­tra­tion offi­cials could cir­cum­vent that requirement.

It also includes an enforce­ment mea­sure that is meant to avert a gov­ern­ment shut­down lat­er this year.

It could have turned out much worse, but the new “work require­ments” sounds just awful. Nego­ti­at­ing with hostage tak­ers nev­er yields good outcomes.

A bet­ter strat­e­gy for avert­ing default would be to invoke the Four­teenth Amend­ment or mint a tril­lion dol­lar coin, rather than going back to embrac­ing bad aus­ter­i­ty poli­cies like Pres­i­dent Barack Oba­ma unwise­ly did in 2011.

We don’t see McCarthy get­ting this “deal” through the House with only Repub­li­can votes or even most­ly Repub­li­can votes. McCarthy will have to frac­ture his cau­cus and depend on Democ­rats to deliv­er most of the votes, or this whole thing will sim­ply col­lapse and the math in the Sen­ate won’t mat­ter. The Fas­cist Cau­cus is already say­ing nope, and more Repub­li­can mem­bers may fol­low suit.

“I am hear­ing the ‘deal’ is for a $4 tril­lion increase in the debt lim­it. If that is true, I don’t need to hear any­thing else. No one claim­ing to be a con­ser­v­a­tive could jus­ti­fy a yes vote,” tweet­ed rabid right wing Con­gress­man Bob Good

If the House Pro­gres­sive Cau­cus (chaired by our own Prami­la Jaya­pal) con­cludes that the deal is not worth sup­port­ing, it will be in seri­ous jeop­ardy pret­ty quickly.

Here’s what the White House had to say about the “deal” — this state­ment is attrib­uted to Pres­i­dent Biden him­self rather than his Press Secretary:

Ear­li­er this evening, Speak­er McCarthy and I reached a bud­get agree­ment in prin­ci­ple. It is an impor­tant step for­ward that reduces spend­ing while pro­tect­ing crit­i­cal pro­grams for work­ing peo­ple and grow­ing the econ­o­my for everyone.

And, the agree­ment pro­tects my and Con­gres­sion­al Democ­rats’ key pri­or­i­ties and leg­isla­tive accomplishments.

The agree­ment rep­re­sents a com­pro­mise, which means not every­one gets what they want. That’s the respon­si­bil­i­ty of governing.

And, this agree­ment is good news for the Amer­i­can peo­ple, because it pre­vents what could have been a cat­a­stroph­ic default and would have led to an eco­nom­ic reces­sion, retire­ment accounts dev­as­tat­ed, and mil­lions of jobs lost.

Over the next day, our nego­ti­at­ing teams will final­ize leg­isla­tive text and the agree­ment will go to the Unit­ed States House and Sen­ate. I strong­ly urge both cham­bers to pass the agree­ment right away.

Here’s what McCarthy had to say about it.

Leg­isla­tive text is sup­posed to become avail­able tomor­row. When it does, we’ll start going through it and scru­ti­niz­ing the many provisions.

McCarthy’s cur­rent plan is to put the “agree­ment” up for a vote on Wednesday.

About the author

Andrew Villeneuve is the founder and executive director of the Northwest Progressive Institute, as well as the founder of NPI's sibling, the Northwest Progressive Foundation. He has worked to advance progressive causes for over two decades as a strategist, speaker, author, and organizer. Andrew is also a cybersecurity expert, a veteran facilitator, a delegate to the Washington State Democratic Central Committee, and a member of the Climate Reality Leadership Corps.

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