Klain said the White House’s plan was straightforward, according to the lawmaker: Refuse to entertain any concessions, and launch a barrage of attacks highlighting the GOP position that would force Speaker Kevin McCarthy (R-Calif.) to fold.
“This debate is simple: We want to do the responsible thing, and they want to take the entire American economy hostage to cut Social Security and Medicare,” said the member of Congress, speaking on the condition of anonymity to reflect private conversations. Klain told the lawmaker that the fight could result in substantial political benefits for the Democratic Party. “The point he was making was clear: You can’t negotiate with people who take hostages.”
But the question remains what the administration will do if Republicans won’t raise the debt limit without negotiations.
House Republicans have increasingly signaled that they will force a showdown with the administration over the nation’s debt ceiling, which sets a statutory limit on how much the federal government can borrow. The Treasury Department said Thursday that the government has hit the current $31.4 trillion limit, and it’s now undertaking complex financial maneuvers so that federal agencies can operate — and bills can be paid — without borrowing more. That will work until sometime this summer, but at some point, Congress will need to raise or suspend the debt ceiling, or the United States will default on its obligations for the first time, undermining the full faith and credit of the U.S. government and potentially causing a global economic shock.
Many GOP lawmakers have said that they will not approve a debt ceiling increase without cuts to spending programs that the Biden administration has vowed to protect, creating an impasse with no clear resolution.
The GOP’s stance has forced White House officials to grapple in recent weeks with what their options would be if the Treasury Department can no longer meet the federal government’s payment obligations, according to five people with knowledge of preliminary internal conversations.
Those discussions have led administration officials to conclude, at least for now, that the only viable path is to press Republicans to abandon their demands to extract policy concessions over the debt limit — a position they have publicly reaffirmed in recent weeks. The Biden administration is focused on pressing the GOP to unveil a debt limit plan that includes spending cuts, with the hope that such a proposal will prove so divisive among Republicans that they are forced to abandon brinkmanship. This strategy stems in part from the belief among White House officials that it would be enormously risky either to negotiate policy with the GOP on the debt limit or try to solve it via executive order — and they appear willing to put that premise to the test.
A White House spokesman declined to comment on internal discussions but pointed to press secretary Karine Jean-Pierre’s prior remarks on the debt limit, including her claim that “we’re just not going to negotiate about that.”
“My sense is the White House believes that agreeing to negotiate sets an awful precedent for holding hostage the country’s creditworthiness to push policy preferences. I don’t believe they’ll go down that path, nor do I think they see any credible unilateral options to resolve the impasse,” said Daleep Singh, who served as deputy director at the White House National Economic Council for Biden and is now at PGIM Fixed Income. “They expect Republicans to ultimately end the…
Read More: White House wants to force Republicans to abandon debt limit threats
