McConnell Debt Pledge May Sap McCarthy’s Push for Spending Cuts
Bloomberg
Published Jan 20, 2023 19:19
(Bloomberg) -- Speaker Kevin McCarthy’s push to use the threat of a catastrophic debt default to extract spending cuts from Democrats risks being undermined by his fellow Republican Mitch McConnell, who’s assuring that the US will never breach the limit.
Senate Minority Leader McConnell said Thursday he believes talks with President Joe Biden on a spending compromise will ultimately resolve the standoff. But his optimism about averting a market-rattling event diminishes the urgency and may temper how far House conservatives can take their demands within their own conference.
The early differences between the GOP leaders don’t bode well for Republicans in a Washington where the most united party with the most popular message usually wins policy fights.
At the same time, the Democratic side is also showing some fractures.
Biden’s firm “no negotiation” stance on the debt ceiling was publicly countered this week by Senator Joe Manchin. The West Virginia Democrat, a moderate and a critical vote in the Senate, said he wants a deal with the GOP on a fiscal commission in exchange for a debt-limit increase.
‘Arrogant’ Quip
“Kevin McCarthy, it’s a wonderful opportunity for him to say ‘Listen, let’s act like the adults,’” on the build-up in US federal debt, Manchin told Bloomberg Television. “Who’s at fault? We’re all at fault. How do we fix it together and move forward?”
Biden, in remarks Monday in Washington, touted the falling deficit and took a veiled shot at critics and deficit-hawks as “fiscally demented,” without specifying who he was referring to.
The US reached its $31.4 trillion debt ceiling on Thursday, triggering the Treasury Department to deploy accounting measures to keep making federal payments. Those are expected to last at least until early June.
McCarthy, who has called the president “arrogant” for refusing to negotiate with Republicans, points out that Biden as vice president negotiated spending caps with the GOP in 2011. Biden also used to talk about the need to control budget deficits, McCarthy has stressed.
McConnell’s Assurance
The speaker is hoping to pressure the president, who was inaugurated two years ago on a pledge to reach across the aisle, into talks well ahead of the June deadline. Any debt-ceiling increase must pass the House.
“Who wants to put the nation through some type of threat at the last minute with the debt ceiling? Nobody wants to do that,” McCarthy said Tuesday.
House Republicans have been coy about pledging to avoid any debt default — contrasting sharply with McConnell.
“Periodically the debt ceiling has to be lifted and it’s always a rather contentious effort,” McConnell told reporters in Kentucky on Thursday. “In the end, I think the important thing to remember is America must never default on its debt. It never has and never will.”
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McConnell, who negotiated directly with Biden in 2011, said he believes the president will come around to talks.
Written By: Bloomberg
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