Image for Negotiations to Raise Debt Ceiling Still Stalled
President Biden and House Speaker Kevin McCarthy remain deadlocked on negotiating a debt ceiling increase.

Republicans Want to Meet, Biden Wants GOP Budget First

The deadline to extend the national debt limit hasn’t budged, and neither have President Biden or House Republicans. Stalemate still rules. The clock is ticking.

Deadlock isn’t necessarily gridlock. Both sides are still in the positioning phase of negotiations. Democrats want a clean debt limit increase. Republicans want an as-yet undetailed list of spending cuts. Biden says he won’t negotiate until Republicans produce a plan. Republicans complain they can’t negotiate without a partner.

The partisan foreplay is largely a reflection of unresolved disagreements among the five factions in the House GOP caucus. Speaker Kevin McCarthy insists House Republicans are close to agreeing on their starting negotiating position. Both sides are playing political chicken in the belief the other side will be blamed if no deal is reached. Some lawmakers think there will enough political shrapnel to injure both sides.

As a holding position, McCarthy has floated what one Capitol Hill observer called a “non-exhaustive” list of spending cuts. A more defined set of demands will be necessary to make it through the Democratically controlled Senate and that will be the pressure point for McCarthy in managing his slim majority.

Congressman Garret Graves, R-Louisiana, who chairs the GOP leadership committee that sorts out policy positions, says Republicans could try to push their own spending reduction plan, but believes “what all of us would prefer is to actually engage and have a discussion.” Graves added that Republicans aren’t as-yet wedded to a specific policy solution “so long as it meets the conference’s stated goal of slowing spending.”

House Republicans face an awkward situation on spending after the nonpartisan Congressional Budget Office scored a GOP energy package as adding to the national deficit over the next 10 years, ironically by accelerating the infrastructure investments Biden championed.

The bipartisan congressional Problem-Solvers caucus is working on a ‘framework’ without specific numbers.

One possible back-up idea could come from the congressional Problem-Solvers Caucus. New Jersey Democratic Congressman Josh Gottheimer said the bipartisan group has met and may quickly produce a concept both sides could accept. “It’s more of a framework,” explains Congressman Scott Peters, D-California. “There’s no specific recommendations about numbers.”

The fruits of split control of the federal government are beginning to sprout, which could affect the willingness of House Republicans to deal on the debt limit. Biden issued his first presidential veto on a resolution to overturn a retirement investment rule that allows managers of retirement funds to consider climate change and other environmental, social and governance factors when picking investments. The resolution made it to Biden’s desk when two Senate Democrats joined Republicans to pass it.

Biden has threatened to veto the House GOP’s energy package that would increase oil drilling and roll back elements of Biden’s climate agenda. There’s doubt the bill could pass in the Democratically controlled Senate.

Partisan sparring isn’t limited to floor votes. Congressman Jim Jordan, R-Ohio, chair of the House Judiciary subcommittee on Weaponization of the Federal Government, entertained testimony on social media censorship last week from two GOP state attorney generals, but didn’t allow cross-examination by Democratic panel members. Jordan justified the exclusion by saying Republicans weren’t allowed to cross-examine witnesses before the Select January 6th Committee. Former House Speaker Nancy Pelosi had rejected placing Jordan on the committee because of his potential role in the Capitol attack.

Recent mass shootings have raised the political temperature on Capitol Hill as Biden and many Democrats have called for stiffer gun control including a ban on assault-style rifles, while Republicans have refused to consider further controls, even as states and courts are weakening or throwing out existing gun restrictions.

Social Security and Medicare
Another log on the fire comes from Social Security trustees who report retirement benefits could be trimmed by as much as 23 percent as early as 2034 because of revenue shortfalls, aging Baby Boomers and higher costs per beneficiary. They issued a similar report last year predicting dire financial straits in 2035.

Even though Biden and congressional Republicans have foresworn wrapping Social Security into the current debt limit debate, pressure is mounting for a solution. “Congress must take its responsibility to protect Social Security and Medicare seriously, by developing a comprehensive plan and doing so in a way that is accountable and fully transparent to the American public,” says AARP CEO Jo Ann Jenkins.

Some 67 million Americans are Social Security beneficiaries for a system supported by 180 million workers. Medicare expenditures in 2022 totaled $905 billion, which was 3.7 percent of the U.S. gross domestic product.

Biden has called for the Social Security payroll tax to earned income above the current cut-off at $160,200 annually, which would provide a short-term solution. Social Security trustees have said a 4.15 percent payroll tax increase split between employers and workers could keep Social Security’s retirement and disability trust funds solvent for another 75 years. The payroll tax funding Medicare is not capped at any income level but workers earning more than $200,000 annually pay an additional 0.9 percent.

The Medicare Supplemental Medical Insurance Fund, which pays for outpatient care and receives premium income and government support, is financially healthy, according to the trustees.