Should Biden negotiate with the GOP over the debt ceiling?

“The 360” shows you diverse perspectives on the day’s top stories and debates.

What’s happening

For months, Republicans and Democrats in Washington have been locked in a high-stakes game of chicken over the debt ceiling.

Republicans in control of the House of Representatives say they will only vote to raise the debt limit — which Congress must do in the coming weeks to stave off an economic catastrophe — if the plan includes significant cuts to government spending programs. President Biden has insisted he will not negotiate at all, accusing the GOP of holding the U.S. economy “hostage” in order to force through policies that the vast majority of Americans oppose.

The debt ceiling is a dollar figure set by Congress that represents the maximum amount the U.S. Treasury is allowed to borrow. It doesn’t itself increase the deficit, but simply creates room for the government to keep its financial commitments. For most of the past century, the debt ceiling was routinely raised on a bipartisan basis, with little drama. But starting in the Obama era, Republicans began using the risk of default as leverage to try to coax Democrats into agreeing to spending cuts. The strategy worked to secure some modest spending reductions in 2011, but Democrats held their ground when the GOP tried to do the same thing again two years later.

This week, House Speaker Kevin McCarthy, R-Calif., released a proposal to raise the debt ceiling enough to delay default until early next year, in exchange for trillions of dollars in spending cuts over the course of the next several years. Biden said the plan — which would cap spending growth, impose new work requirements on certain welfare programs, and gut some green energy programs passed by Democrats last year — is full of “wacko notions” and reiterated his position that he will not negotiate over the debt ceiling.

Why there’s debate

Most Democrats have stood by Biden in his refusal to make concessions in exchange for raising the debt ceiling. They argue that caving in to the GOP’s threats would only reward them for putting the country’s economic stability at risk and encourage them to ask for bigger cuts the next time around. Many also add that the Republican caucus is so fractured that Republicans may not be able to come together behind a single plan, making negotiating with them akin to “trying to nail jello to a tree.” Among this group, there’s a general belief that the practical and political dangers will persuade enough Republicans to back down and support a last-minute debt ceiling hike.

But with the default potentially only a few weeks away, some members of Biden’s party believe the risks are so great that the president has no choice but to pursue a deal with Republicans. Sen. Joe Manchin, the moderate Democrat from West Virginia, accused Biden of showing a “deficiency of leadership” and encouraged the two sides to “stop with the political games, work together and negotiate a compromise.”

Conservatives, for their part, widely argue that these negotiations are necessary to get the country’s massive deficit under control. In their eyes, the threat of default is the ideal leverage to convince Democrats to curb government spending and embrace what they see as a more responsible approach to the national budget.

What’s next

There’s no firm date for when the U.S. will formally enter default, but a new analysis released earlier this week suggests that point could come as soon as early June.

McCarthy is expected to try to bring his budget plan up for a vote next week, but there’s considerable doubt over whether it will have enough Republican votes to pass through the House. Even if it does, the plan is widely seen as dead on arrival in the Democratic-led Senate. If Congress can’t pass a deal, there are a handful of untested ways some experts believe the White House can avert a default through executive action — including minting a trillion-dollar coin to finance the country’s debt.

Perspectives

Biden shouldn’t cave in to the GOP’s hostage-taking

“McCarthy’s suggestions about what a deal might involve are barely worth discussing. On one side, giving in to blackmail — for that’s what a deal would amount to — would set a terrible precedent. On the other, it’s not clear that McCarthy could make good on a deal even if the Biden administration were willing to go along.” — Paul Krugman, New York Times

Agreeing to a few minor cuts could be the only way to prevent economic calamity

“Neither side will get all of what they want. But House Speaker Kevin McCarthy has the most delicate tightrope to walk — and is left with the most thankless job in the negotiations. In public, Democrats can be as harsh as they want. But at the negotiating table, finding ways to allow McCarthy to claim a couple of victories could keep the time bomb from exploding.” — Patrick T. Brown, CNN

Biden has options to protect the economy without Congress if he needs them

“Given that the Federal Reserve is not a real barrier to solving the debt ceiling crisis without Congress, the White House has the freedom to be bolder. Joe Biden and [Treasury Secretary] Janet Yellen should threaten to deploy any of the alternative options being proposed, and if Republicans don’t pass a ‘clean’ debt ceiling increase, simply use one of them. The White House doesn’t have to negotiate with hostage takers, so it shouldn’t.” — Nathan Tankus, Politico

If this really is the crisis Biden says it is, he has no choice but to negotiate

“For some time the Biden White House has been occupying what ought to be an untenable position: warning about dire consequences if the federal debt limit is not raised while simultaneously refusing even to consider potential compromises to raise it.” — James Freeman, Wall Street Journal

The modern GOP may actually be willing to drive the economy off a cliff

“Obama’s no-negotiating posture on the debt ceiling worked mostly because enough congressional Republicans back then were unwilling to plunge over the cliff into default. The White House and financial markets around the world are certain to face many white-knuckled moments before they learn whether that is still true today.” — Ronald Brownstein, Atlantic

Making small concessions will only encourage the GOP to ask for more extreme cuts

“If Biden, against his own instincts and the counsel of his advisers, began a process of trying to find some token cuts to give Republicans, that would muddy the waters and create pressure for more cuts.” — Robert Kuttner, American Prospect

Negotiating can avoid a crisis and put the country on more stable economic footing

“The president also needs to acknowledge that current rates of tax and spending are unsustainable, that his recent budget plan fails to put this right, and that the big two entitlement programs do indeed need reform. To avoid an immediate crisis, he should commit to finding a judicious mix of higher taxes and lower spending in exchange for a reasonable extension of the debt limit as talks progress.” — Editorial, Bloomberg

Both sides need to cut the hard-line posturing and make a deal

“The impasse created by years of poor, myopic decision making in Washington is pushing the federal government ever closer to a dangerous cliff. McCarthy and Biden need to get serious about this, and soon.” — Eric Boehm, Reason

Enough moderate Republicans could balk if default becomes a real possibility

“There might be just enough House Republicans unwilling to trigger a default and a potential global economic catastrophe to force McCarthy to cave and allow a debt measure to get to Biden’s desk with or without token concessions made to save the Speaker’s face and gavel. He and his party really need a fiscal plan B that’s more viable than destructive threats and empty posturing.” — Ed Kilgore, New York

McCarthy is begging Biden to give him something to count as a win so he can escape this mess

“In general, these are politically sound proposals, but this is not a plan that even approaches the restoration of fiscal sanity. McCarthy is looking for a face-saving off-ramp from the impending debt-ceiling crisis. The White House will not give him one.” — Noah Rothman, National Review

McCarthy hasn’t put forward anything that warrants serious discussion

“The GOP proposal is unserious on a few counts. For one, it is self-evidently not concerned with coming to fruition; the primary conservative goal is to egg Biden and Democrats on to support cuts, lest the government default.” — Prem Thakker, New Republic

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