How past debt containment crises shaped Biden’s no-negotiation stance

As a debt limit crisis loomed in 2011, Vice President Joseph R. Biden Jr. the early negotiations with Republicans as civil, at one point suggesting the process was about figuring out who was willing to trade their party’s bike for the other party’s golf clubs. .

The genteel atmosphere came to a screeching halt that summer, when Chairman John A. Boehner walked away from a deal because he couldn’t criticize Republicans in his caucus. Months later, congressional leaders agreed to raise the debt ceiling and cut trillions in federal spending to avoid default.

The bitter compromise convinced Mr. Biden of two things, according to half a dozen current and former advisers: Don’t negotiate with a speaker who can’t reach an agreement — Mr. Boehner’s caucus was arguably less radical than the current bloc of House Republicans — and change the process of avoiding government bankruptcy in a discussion of budgeting.

“That was quite a terrifying transition, because all of a sudden you’re negotiating whether or not to default,” Jacob J. Lew, the Treasury Secretary under President Barack Obama, recalled the 2011 saga.

Mr. Lew added: “It really made you feel like this might as well have failed.”

Twelve years later, the government is again at risk of defaulting on its debts for the first time, and Republicans in the House are again demanding cuts in exchange for an increase in the debt limit. Facing the biggest economic obstacle of his presidency and leaving with the searing memory of the Obama-era fighting, Mr. Biden has maintained the position that the debate over raising the $31.4 trillion debt limit should be loosened. taking place of spending negotiations, advisers say.

That hasn’t always been the case. Republicans have pointed out in recent weeks that Biden, as a senator, railed against budget deficits during Reagan’s presidency. In 1984, he presented a proposal to freeze federal spending for a year. He said his plan would “shock everyone in the U.S. Senate,” but it went nowhere.

And as vice president, Mr. Biden balanced the debt limit and budget issues in 2011, when he negotiated for the Obama administration. In remarks to reporters on Tuesday, Mr Biden suggested he did so only because he had been instructed to close a deal.

“I got a call at 6 a.m. that morning that the Republican leader wanted to talk to me alone, and there was no time left,” he said. “And so I sat down, and I was instructed by the White House to handle it. And that was my job. But I didn’t notice it.”

In the spring of 2011, Mr. Biden and a bipartisan group of congressional leaders met regularly to talk out their differences. In early meetings, the group would gather at Blair House, where foreign dignitaries stay when they visit Washington. That summer, Mr. Boehner broke off negotiations, largely because mainstream Republicans would not agree to tax the wealthy. Weeks later, a complex deal was reached, requiring Obama to explain to Democratic voters why he couldn’t raise taxes and had agreed to at least $2.4 trillion in spending cuts.

According to Mr. Biden’s aides, the scar tissue remains.

The second debt-ceiling battle of the Obama presidency, in 2013, was another test for a divided administration: Obama flatly refused to negotiate, and Republicans, suffering from falling polls and the political toll of a credit rating downgrade of the country, eventually declined.

Mr Biden has since argued that there should be no conditions attached to raising the federal debt limit, the limit on the amount of money the United States can borrow to fund the government and meet its financial obligations, including disbursement. social safety net programs and the financing of the armed forces’ salaries.

Biden aides point out the obvious: Relations between Republicans and Democrats have become even more fraught over the past decade. The last time a divided government threatened to push debt limit negotiations to the limit, Twitter was in its infancy and the idea of ​​a President Donald J. Trump was little more than an afterthought.

Now, at a time when a large group of House Republicans remain loyal to Mr. Trump and want to hurt Mr. Biden out of political principle, there is little compromise to be found on substantive matters, including the budget.

“If your question is to make sure the economy doesn’t collapse, and their question is everything else, how do you get caught in the middle of that?” That’s what Dan Pfeiffer, a former senior adviser to Obama, said in an interview. “I remember everyone believed we would never walk that path again.”

Republicans argue that instead of holding the country’s debt obligations hostage, they are responding to Democrats who have long been blind to the rising interest costs associated with the debt.

In a meeting with Chairman Kevin McCarthy on Tuesday, several advisers said, the president sought to highlight the consequences of default and get leaders to agree that it should be avoided at all costs. But officials in the Biden administration recognize that even if everyone agrees that default should be avoided, working back from there will be the painful part.

“There is a very large gap between where the president is and where the Republicans are,” said Treasury Secretary Janet L. Yellen, who has warned that the United States could default as early as June 1. said on Monday.

Mr Biden said he had asked the group to reconvene on Friday and staffers would meet throughout the week. Two advisers said they expected similar meetings to take place on a regular basis. Still, officials on both sides are not too optimistic that a painless deal will be reached any time soon.

Tuesday said Mr. McCarthy that he “found no progress” in the meeting and criticized the president’s suggestion that he might look at invoking a clause in the 14th Amendment that would force the federal government to continue issuing new debt if the government is out of money.

“I’d think you’re kind of a failure at working with people across the aisle or working with your own party to get something done,” Mr. McCarthy said.

Mr. Biden and Senator Mitch McConnell of Kentucky, the minority leader, keep in touch regularly, aides say, but the president’s advisers are reluctant to hope that Mr. McConnell will find a way out of the debt-ceiling quagmire.

The president also has an untested Democratic ally in Representative Hakeem Jeffries of New York, the minority leader in the House, who should muster the votes needed to reach a compromise. (Mr Pfeiffer pointed out that in previous debates Mr McConnell has come in at the last minute, “when he has the most clout”, reaching an agreement “which is actually enough for him, it passes and then he leaves town. ”)

There will be little agreement on the budget. Mr. Biden wants to expand federal spending and reduce future debt by taxing corporations and high earners, a plan his administration says could reduce deficit growth by about $3 trillion over the next decade. Republicans want to extend Trump-approved tax cuts, which were due to expire at the end of 2025.

Late last month, Mr. McCarthy pushed through a spending bill that would cut deep into the president’s domestic agenda and reduce discretionary spending, though Republicans have not indicated what could be cut or why. Since then, the Biden White House has happily filled the void by accusing Republicans of wanting to cut everything from veterans’ health care spending to Social Security. (Mr. McCarthy has called this a “lie”.)

Ahead of the next meeting, the president’s advisers said they did not expect Mr Biden’s message to change, but suggested that both sides would have to make concessions. Mr Biden’s comment on Tuesday that he might be willing to support the withdrawal of unspent coronavirus relief funds – and meet a Republican demand – could be the kind of compromise that would prevent talks from calcifying .

But Mr Biden’s aides also expect him to highlight the political interests of Republicans in the coming weeks if they refuse to budge on the debt limit. He will do so not only from the White House, but also from congressional districts.

On Wednesday, the president was in New York’s Hudson Valley region, where Rep. Marc Molinaro, a Republican whose district includes parts of the area, accused him of playing a “game of chicken.”