Biden v. McCarthy: Politics of the Budget and Debt Ceiling Negotiations
April 3, 2023
There is renewed interest in restarting the Federal budget and debt ceiling negotiations. Last week, President Joe Biden and Speaker Kevin McCarthy traded barbs in the media over who was responsible for the breakdown in negotiations.
Why it matters:
- The U.S. risks defaulting on its debt obligations this Summer if the debt ceiling isn’t raised.
- Congress has to fund the government for the next fiscal year, which starts on October 1.
How we got here?
- February 1: President Biden and Speaker McCarthy met to discuss the debt ceiling and budget. While the meeting bared no fruit, both sides said they would continue to work together to negotiate the debt ceiling and budget.
- March 9: President Biden submitted his budget request to Congress four and a half weeks late. According to the Congressional Budget Act of 1974, the President must submit a budget by the first Monday in February, which was February 6 of this year.
- March 10: Speaker McCarthy said to the media, “We were going to do the budget in April, but unfortunately, the President’s so late with his budget, it delays ours.” McCarthy also said he is waiting for Biden to invite him to the White House for another meeting.
- March 28, 8:18 am: Speaker McCarthy sent a letter to the President calling for a return to the negotiating table to discuss the budget and looming debt ceiling by setting an end-of-week meeting.
- March 28, 6:23 pm: President Biden responded with a letter of his own and stated, “For our conversations to be productive,” House Republicans should submit a budget before the House goes on a two-week recess.
- March 30: Speaker McCarthy said House Republicans would try to raise the debt ceiling themselves if the President doesn’t return to the negotiating table, signaling a change in strategy.
The big picture: The ideological division in the House Republican conference has made producing a unified House Republican budget proposal or debt ceiling deal difficult to produce, if not impossible. McCarthy ally House Financial Services Chair Rep. Patrick McHenry (R-NC) said last week, “I don’t see how we get there [the debt ceiling deal].”
Our thought bubble: If Republicans move alone on anything but a clean debt ceiling increase, they are going to have a difficult time passing something into law. However, the politics of a closely divided Senate make the path in the upper chamber unclear.
Contact Chelsea Neil at cneil@crefc.org with any questions about this story.