Joe Biden Steps Into Debt Ceiling Void As Outlines Of Deal Materialize
WASHINGTON -- Negotiations over raising the nation’s debt ceiling will hit a heightened, more critical phase on Thursday when a bipartisan, bicameral group of lawmakers are set to meet with Vice President Joseph Biden at the Blair House.
The Vice President’s office did not immediately confirm or comment on his upcoming schedule. And the contours of the negotiations have thus far been vague, as discussions between lawmakers have remained primarily informal. Moreover, the timeframe in which a deal must be struck was expanded on Monday, when Treasury Secretary Timothy Geithner alerted members of Congress that the government could continue to run for a month longer than previously anticipated without exceeding its debt limit.
But at least four sources, three of them from Capitol Hill, offered similar descriptions of a final arrangement that is beginning to take form.
In addition to raising the debt ceiling from its current limit of $14.3 trillion, lawmakers would include legislative language in the bill that called for caps on government spending in over the next one or two years. The level at which that cap would be set is unclear and is likely to be a major fault line during discussions. In addition, lawmakers will include a debt failsafe “trigger” that would kick in once those caps expire. Such a policy -- which would require that the ratio of debt-to-GDP be reduced to a certain level if Congress cannot stabilize it by the end of the decade -- could take several forms. Democrats, however, will insist that revenue raisers or adjustments to the tax code be part of the deal.
“That’s the ball game,” one top Democratic aide said of ensuring that tax policy be part of the final arrangement to raise the debt ceiling.
“[T]hey want to make it a trigger that allows for revenue,” added another Democratic Senate aide. “But this arrangement wouldn’t preclude them from saying they will cap spending for, say, 2012. It would allow them to say here is your spending.”
Pulling off such a legislative arrangement will be a challenge for the administration. For starters, the White House has not formally given up its position that there should be a vote on a “clean” debt-ceiling bill. Moderate Senate Democrats, however, are insisting the deficit or debt-reduction measures be added. A top aide for one of those Senators said there was deep concern that a failed party-line vote (House Republicans wouldn’t pass a "clean" bill) would damage both the markets and the White House.
In addition, it seems uncertain (at this juncture at least) that Republicans would agree to any deal that opened the door for tax hikes. "Let’s discuss the art of the possible," Senate Minority Leader Mitch McConnell (R-Ky.) said on the senate floor Wednesday. "We all know tax increases won’t pass the House because of the damage they’d do to family budgets and businesses — and a bipartisan majority here in the Senate opposes raising taxes on families, energy production and small businesses across America. So let’s set that aside and find common ground."
Nor is it certain, for that matter, that progressives will back strict spending caps. One labor official, suggesting that unions might oppose any such policy, took a particularly harsh swipe at freshman Sen. Joe Manchin (D-W.Va.) for signing on to the CAP Act -- the proposal introduced by Sens. Claire McCaskill (D-Mo.) and Bob Corker (R-Tenn.) that would bring government spending down to 20.6 percent of GDP over the course of ten years. Pointing to a litany of West Virginia projects that are dependent on federal spending and would be endangered by the policy, the official emailed:
Manchin is hypocritical, at best, in his support of the CAP Act. It will hurt seniors in West Virginia by cutting Medicare & Social Security. And it will hurt key economic development projects in West Virginia -- ones he has supported. He's tripping over himself to show he's serious about the deficit that he's supporting proposals that are bad for West Virginia. Senator Byrd had a strong legacy of helping West Virginia and now Senator Manchin is threatening to undo all that great work for the people of West Virginia.
Manchin’s office noted that between 1993 and 2008 -- the full terms for Presidents Clinton and Bush -- federal spending was 19.7 percent of GDP. Yet over the past two years, it jumped from 20.7 percent to roughly 24 percent. The CAP Act would give Congress a decade to get it back down to a level a percentage point above where it was when Bush left office.
“I think the fundamental question that lawmakers have to ask themselves is: Are we serious about living within our means? Are we serious about putting an end to the record debt we have racked up and will continue to incur? Are we serious about changing our tax system to make sure everyone pays their fair share? Or should we continue to ignore this problem and pass on crippling debt to the next generation?” the Senator said, in a statement provided to The Huffington Post.
“If we don’t act now to get this nation’s financial house in order, the very programs like Social Security and Medicare that I -– along with many of my colleagues –- am so deeply committed to protecting might be severely altered for the next generation," the statement continued. "And that is why we cannot have this debate in terms of the next election; it has to be about what is best for the next generation.”
Into the crossfire steps Biden. On Thursday, the Vice President will host House Majority Leader Eric Cantor (R-Va.), House Budget Committee ranking member James Clyburn (D-S.C.), Rep. Chris Van Hollen (D-Md.), Sen. Jon Kyl (R-Ariz.), Senate Finance Committee Chair Max Baucus (D-Mont.) and Senate Appropriations Committee Chair Dan Inouye (D-Hawaii). The meeting, aides say, will be almost exclusively focused on cutting a deal on the debt ceiling, leaving a broader discussion over deficit and debt reduction to congressional negotiators, namely the "Gang of Six."
“[Biden] is the only game in town anymore,” said one top Senate Democratic aide. Another aide said that Biden would follow up the meeting with a visit to the Hill to continue talks on the debt ceiling sometime next week.