Friday, November 22, 2024
Politics

Biden resorts to a classic D.C. punt on the debt ceiling. Progressives aren’t pleased.

But there’s reason to be skeptical that concrete action will come soon, if at all. There’s no clear timeline for the project and little in the way of overt direction, outside of analyzing various theories for defusing the debt ceiling.

And for the growing cadre of lawmakers, economists and legal scholars still attuned to the issue, Biden’s decision to hand it off to a working group represents a decidedly mundane response to an urgent and existential dilemma.

“We are going to get pummeled on this over and over and over again,” said Rep. Pramila Jayapal (D-Wash.), who lobbied Biden earlier this year to simply ignore the debt ceiling on grounds that defaulting is unconstitutional rather than give in to Republicans’ negotiation demands. “So I hope it’s quick. I hope it’s decisive. We have the answer right in front of us.”

The group’s creation comes as Congress’ need to raise the debt limit has become a more common negotiating tool for the Republican majority, threatening U.S. creditworthiness and putting the global economy at risk. After weeks of tense negotiations this spring, Biden struck a deal with House Speaker Kevin McCarthy to suspend the debt ceiling past the next election.

But the GOP’s steep demands — and the willingness among some in the party to default regardless of the outcome — has fueled calls for a workaround from Democrats spooked by the prospect of a more unpredictable rematch in 2025 if Biden wins reelection but Republicans control both the House and Senate.

“It feels like a threshold was crossed,” said Robert Hockett, a Cornell University professor who has studied legal justifications for ignoring the debt limit. “Some Democrats are finally waking up to that.”

White House counsel Stuart Delery and top economic adviser Lael Brainard are leading the administration’s working group, which aides and outside advisers to the White House characterized as a serious undertaking to vet every possible route for sidestepping future crises. In a sign of its openness to all options, the White House enlisted Harvard Law professor Laurence Tribe to be among the first eight outside legal and economic scholars to meet with the group. Tribe was among the most vocal advocates for circumventing the debt crisis by invoking the 14th Amendment, which states that the “validity of the public debt” cannot be questioned.

Despite touting the final compromise, Biden came away from this spring’s debt ceiling talks troubled by how close the country had come to default — and persuaded of the need to search for an alternative, they said.

The president has repeatedly expressed openness to testing the popular liberal theory that the 14th Amendment invalidates the debt ceiling. That he’s created a working group, officials say, is not evidence that he’s backed off of that. Instead it’s a notable step for an institutionalist who just nine months ago called eliminating the borrowing limit “irresponsible.”

“It’s not a gimmick, it’s not designed to deal with a short-term political need,” said one economic adviser to the White House granted anonymity to freely discuss the group. “He genuinely wants to come up with a solution that might be saleable on Capitol Hill.”

Still, the administration faces an uphill battle in proving to progressive allies that the group is more than a kicking of the can.

The White House already consulted with experts throughout the most recent debt ceiling standoff, a process that did little to shake its belief that Congress needed to resolve the crisis. It rebuffed pleas from progressive lawmakers to deploy the 14th Amendment and ruled out other unilateral options — like minting a coin to pay for a debt ceiling hike. Though Biden signaled a desire to test the legal theory behind the 14th Amendment once the immediate standoff was over, the administration has not yet tried to do so.

Progressives said that if the administration spends months studying the issue only to come to the same conclusion that Biden is powerless on his own, it’ll be a waste of time. And they fear it will only further embolden the GOP to use the prospect of economic collapse as leverage.

“The debt ceiling was a bad idea when it was first put in place, and it has become the worst idea as the Republicans have figured out how to weaponize it,” said Sen. Elizabeth Warren (D-Mass.). “I’ll be very blunt. I don’t care how we get rid of the debt ceiling, so long as we get rid of it.”

The White House declined to comment about the group’s activities and timeline, with an official cautioning only that the process “will take some time.” It plans to hold a series of sessions with outside experts across a range of fields, as well as with lawmakers, though the first of those meetings hasn’t yet been scheduled.

Even the administration’s close allies don’t know what to expect. Jayapal, who received advance notice of the team’s creation, said she was still awaiting basic details like how long the group planned to work on the issue and what it hoped to produce.

Others said they didn’t even know the effort was in the works — a low-key approach that’s unnerved some lawmakers who welcomed the focus on the debt ceiling but questioned the point of conducting a drawn-out study.

“I don’t think we need a [working group] for that,” said Sen. Richard Blumenthal (D-Conn.), who argued the options for avoiding a debt ceiling battle are obvious, but that the group might be helpful to “build support for some of those answers.”

In the White House, officials portrayed the more rigorous approach as necessary to justify whatever solutions the administration settles on.

Biden would need to make a forceful case for any drastic action to a Democratic Party and broader public still fractured over the debt ceiling’s merits and the seriousness of the nation’s fiscal health.

“I agree that we should think about how to reform the debt ceiling, but I would have grave concerns about eliminating it completely,” said Maya MacGuineas, president of the nonpartisan Committee for a Responsible Federal Budget. “We would be fiscally unwise to remove the only action forcing movement without replacing it with something that would work at least as well for improving the fiscal situation.”

Several Democratic lawmakers have proposed legislation that would overhaul the debt limit and decouple it from the fate of the broader economy. Most, including Biden’s working group, are likely to agree those bills are the best way to eliminate the debt ceiling threat.

But with Congress deeply divided and Republicans making clear they view such standoffs as opportunities to win concessions, it may also be the least practical.

“It’s impossible for us to act like this is a reasonable Congress,” Jayapal said. “We just need to come to terms with that. We need to take it off the table because it’s hurting our faith and credit.”

source

Leave a Reply

Your email address will not be published. Required fields are marked *