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How progressives are thinking about the debt limit crisis
Plus: The latest on the talks ahead of a make-or-break week and the impact a default would have on US national security.
FIRST THINGS FIRST
The debt limit crisis remains the major political story right now and for good reason: This week is the last the House and Senate will be in DC at the same time unless the Memorial Day recess is canceled ahead of the expected “X date” when the US will run out of money to pay its bills.
If that’s not enough, President Joe Biden is scheduled on Wednesday to travel to Japan for the G7 Summit and to the Quad Summit in Australia through late next week, which shrinks the calendar even further.
Below is the latest reporting on where the debate stands heading into these critical next few days. But first, it may be useful to read some thoughts from a conversation I had on Friday with a strategist at a leading progressive advocacy group on how they view the state of play.
“I think that anybody that operates in the space of working with the White House in any capacity or trying to influence members on the Hill, the debt ceiling is by far the largest looming thing because it touches everything that the members are working on,” the progressive strategist said. “Like with the Inflation Reduction Act being on the table in the Republican budget proposal, that is undoing some really good work that these members have worked hard to pass and take home to their constituents. I think that voters are definitely engaged and they’re definitely concerned.”
Among the few areas of compromise between congressional Republicans are lobbying is an extended cap on annual investments that would result in deep cuts to the social safety net.
White House Press Secretary Karine Jean-Pierre on Friday declined to comment when asked for the administration’s message to progressives who may feel nervous about the possibility of these caps, which feel inevitable at this point.
“We’re just not going to negotiate from here. The House Republicans have been very clear how they see moving forward and the cuts that they’ve put forth — those 22 percent cuts in veterans and healthcare and public safety — that’s going to hurt American families,” she said. “And I’ll just leave it there.”
Even though next year’s election feels like an eternity away, the strategist said lawmakers and candidates will ultimately have to answer for their role in the outcome of the debate.
“We have seen that the Republicans are willing to hold our economy hostage, they’re willing to default the US on its debt for the first time, they’re willing to result in hundreds of thousands of people losing their jobs — they’re playing politics with this. It’s just the reality of the situation,” they said. “How are you going to sell that? And if you can't sell your position on things that people need and rely on, then maybe you don't belong in Congress.”
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Biden on the debt limit talks: “I remain optimistic”
President Biden is expected to meet with the top four congressional leaders on Tuesday after staff met through the weekend to discuss spending priorities for next year’s budget. The closed-door conversations have taken place as the White House and congressional Democrats call on Republicans to raise the debt limit without preconditions to avoid a first-ever default.
The meeting was originally scheduled for Friday but postponed to give staff additional time to hold talks.
During a bike ride near his home in Rehoboth Beach, Delaware, the president declined to share many details about how much progress has been made but told reporters that he was hopeful the two sides could ultimately make a deal.
“Well, I’ve learned a long time ago, and you know as well as I do: It never is good to characterize a negotiation in the middle of a negotiation,” he said. “I remain optimistic because I’m a congenital optimist. But I really think there’s a desire on their part, as well as ours, to reach an agreement, and I think we’ll be able to do it.”
Treasury Secretary Janet Yellen said in Japan over the weekend expressed similar confidence that the leaders would find a solution.
The Congressional Budget Office said on Friday that it estimates there is a significant risk that the Treasury will run out of money to meet the US’s obligations in the first two weeks of June if the debt limit isn’t raised or suspended, a projection that lines up with that Yellen released at the beginning of the month.
Deputy Treasury Secretary Wally Adeyemo characterized the budget conversations as constructive in an interview with CNN’s Dana Bash.
“As we have that conversation [about fiscal policy], there is no reason we shouldn’t raise the debt limit and prevent default in this country, a default that could lead to a massive recession that would cost us millions of jobs.”
Senate Democratic Leader Chuck Schumer on Friday sent a letter to senators once again asking Republicans to decouple Congress’s responsibility to increase the US borrowing limit from the annual budget process.
“We welcome a bipartisan debate about our nation’s fiscal future,” Schumer wrote. “But as the president, [House Democratic] Leader [Hakeem] Jeffries, and I made plain to our Republican colleagues, we must not do so under the reckless threat of catastrophic default by the hard-right.”
The crisis is starting to affect consumer confidence, which fell to a six-month low according to a monthly survey by the Univeristy of Michigan.
“It’s affecting the way that [consumers are] spending money. I spend a lot of time on the phones with CEOs of small-, medium- and large-sized businesses. And all of them mention to me the debt limit is affecting the way they’re thinking about business going forward,” Adeyemo said. “And it’s meaning that they're not investing in their companies, not investing in the economy, not creating jobs, the opposite of what they need to be doing.”
The White House argues the data proves that the Republicans’ opposition to a clean debt limit increase is to blame for the growing economic anxiety.
“They’re actually paying attention,” Jean-Pierre said on Friday. “They’re listening to what’s happening and what they’re hearing from Congress, Republicans in the House, laying a plan that says they’re going to potential hold the American economy hostage.”
The international fallout of a US default
The bulk of the conversation around the debt limit has focused on the domestic consequences of default on kids from low-income families, veterans, older adults, and people with disabilities.
But White House National Security Council spokesperson John Kirby told reporters on Friday that even the specter of default could have a detrimental effect on the US’s reputation and standing around the world.
“And it sends a horrible message to nations like Russia and China, who would love nothing more than to be able to point at this and say, ‘See, the United States is not a reliable partner, a stable leader of peace and security around the world.’ So it would send a horrible message.”
Kirby also told reporters that the White House had seen no indication so far that US allies and partners were affected by former President Donald Trump’s unwillingness last week during a CNN town hall to declare President Vladimir Putin of Russia a war criminal for authorizing attacks on civilians and energy-related infrastructure and the unlawful deportation of children.
Trump also declined to say if he wanted Ukraine to win the war, a refusal that emboldens autocrats like Putin and President Xi Jinping of China to claim pro-democracy territories by force.
“Every indication that we have every single day is that the international community — with some very few exceptions, exceptions that we’ve talked about for many months — stands solidly behind supporting Ukraine and continuing to support Ukraine as they fight to defend themselves,” Kirby said.
Related: President Volodymyr Zelenskyy made an unannounced visit to Paris on Sunday night for a working dinner with President Emmanuel Macron at the Elysee Palace, the French government said in a statement.
Macron reaffirmed “the unfailing support of France and Europe to restore Ukraine’s legitimate rights and defend its fundamental interests,” the palace said.
The day before, Zelenskyy met with Pope Francis at the Vatican where the two men spoke about the “humanitarian and political situation provoked by the war going on,” according to a statement.
Support for Ukraine is expected to be a focal point of discussion during the G7 Summit in Japan this week.
See also:“GOP senators push back on Trump’s debt ceiling, Ukraine comments” by Liz Brown-Kaiser, Garrett Haake, and Dareh Gregorian at NBC News … “Ukraine aid is drying up. And the White House is under pressure to send more” by Paul McCleary, Anthony Adragna, and Joe Gould at Politico
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President Biden and First Lady Dr. Jill Biden this morning will travel from Rehoboth Beach, Delaware to Philadelphia to attend his granddaughter’s college graduation before returning to the White House this afternoon.
Biden’s week ahead:
Tuesday: The president, Dr. Biden, and Second Gentleman Doug Emhoff will speak at a Jewish American Heritage Month celebration. Vice President Harris will attend.
Wednesday: Biden will honor 2022-2022 Medal of Valor recipients from across the country and travel from DC to Anchorage, Alaska to Hiroshima, Japan.
Thursday: The president will arrive in Hiroshima and participate in a bilateral meeting with Prime Minister Fumio Kishida of Japan.
Vice President Harris is in DC and has no public events on her schedule.
The House is in this afternoon and will consider two bills under suspension of the rules.
The Senate is in this afternoon and will vote to confirm Bradley Garcia as US Circuit Judge for the DC Circuit.
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