Debt Ceiling Showdown Looms for Biden

President Joe Biden on Friday gave a window into how he’s preparing for a looming political showdown over the debt ceiling, stating unequivocally that he will not relent to Republican lawmakers threatening to send the nation into default if he doesn’t meet their demands, but adding that he doesn’t support Democrats’ efforts to abolish the debt limit entirely. In remarks at the White House less than three weeks before the midterm elections, the President touted a $1.4 trillion decline in the federal deficit and discussed what he sees as dire fiscal consequences if Republicans regain majorities in Congress. If we don't agree to the GOP's demands, Biden claimed, "they will jeopardise the very roots of the American economy." “They will crash the economy next year by threatening the full faith and credit of the United States for the first time in our history, putting the United States in default unless we yield to their demand to cut Social Security and Medicare,” he said. "Allow me to be really clear. I won't back down. I won't make Social Security cuts. No matter how hard they try, I won't slash Medicare. Biden's choice to even bring up the debt ceiling issue, along with his early declaration of red lines for any future negotiations, heightens a very genuine worry that has been simmering among senators who could face Republican majorities. The debt limit has been a threshold that has driven fiscal battles – and one downgrade of the nation’s credit rating – over more than a decade, and several House Republicans have made clear they plan to use it to extract policy wins. Kevin McCarthy, the leader of the House GOP, brought attention to the matter earlier this week with remarks that matched those of a number of his colleagues. McCarthy would likely become the next speaker if Republicans win the majority in November. “If people want to make a debt ceiling (for a longer period of time), just like anything else, there comes a point in time where, OK, we’ll provide you more money, but you got to change your current behavior,” he said in an interview with Punchbowl News. The nation's borrowing limit symbolises the equivalent of a ticking time bomb, and there have been early-stage discussions on both sides of Pennsylvania Avenue about how to handle it. Congress set the cap to control federal borrowing, but every time it has been reached, politicians have increased it. Biden’s unequivocal response to Republican threats came the same day several House Democrats sent a letter to House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer calling for legislation to “permanently undo the debt limit” during the post-election lame-duck session on Capitol Hill. The letter, led by Pennsylvania Rep. Brendan Boyle, was signed by several prominent House Democrats, including Caucus Chair Hakeem Jeffries of New York. Biden said on Friday that he does not support legislation that would permanently repeal the debt ceiling, a proposal he called “irresponsible.” However, there are other potential pathways to address the debt limit in the lame-duck session, even if the tight timeline and packed agenda would appear to make any effort a heavy lift. Biden’s stance on the issue puts him at odds with Treasury Secretary Janet Yellen, who in 2021 expressed support for legislation to abolish the debt ceiling.