Biden, McCarthy say they’ve reached a deal to respond to Republicans’ ransom demands

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.