The Obama-Biden White House agreed to negotiate with Republicans on the debt ceiling. It brought the U.S. economy to the brink of disaster — and the president and the vice president vowed to change their posture.
The U.S. had just suffered its first credit downgrade. Markets were rattled. Consumer and business confidence was shaken. Stocks took a hit. And the recovery from the Great Recession was in question. Democrats averted the cliff — by acceding to $2 trillion in spending cuts the GOP had demanded after negotiations on a “grand bargain” broke down — but Obama and Biden agreed that the mere threat of default had taken a serious toll.
After 2011, the Obama White House drew a hard line when the debt limit deadline came up again in early 2013. Then-White House spokesman Jay Carney said in January of that year: “Congress can pay its bills or it can fail to act and put the nation into default.”
House Republicans relented, attaching a debt limit extension to a symbolic measure calling for passing a budget.
Biden is executing on that lesson as he faces down a new Republican-controlled House that is similarly demanding spending cuts as a concession for extending the debt ceiling. He says there won’t be any negotiations, and Congress must allow the government to pay its bills. “I will not let anyone use the full faith and credit of the United States as a bargaining chip,” Biden said Thursday in Virginia.
It’s unclear whether McCarthy can find 218 Republican votes for a bill of his own in his narrow House majority. And, so far, Republicans have no unified plan as to what spending they want to cut.