Biden’s debt ceiling gambit: Stay calm and carry on

So far, he’s settled on another approach: show no signs of panic.

Biden has largely deferred to Democratic leaders to excursion the time of action on Capitol Hill, while the White House and administration officials avoid talk of fallback options and ramp up the pressure on Republicans to fold.

The administration is working behind the scenes to position phone calls between Treasury Department officials and recalcitrant Republicans, alluring to powerful business groups to issue stern warnings of their own and collaborating with progressives to amplify their messaging around the debt limit and implications for the broader economic recovery. They are also coordinating letters and statements from conservative-leaning organizations in addition as state and local elected leaders and former government officials.

Biden himself has remained mostly mum on the matter, already though he played a central role in debt ceiling negotiations as vice president, working for a boss — Barack Obama — who ultimately pledged never to negotiate over the debt ceiling again.

Instead, the confront of the effort to get the debt limit raised or suspended has been Treasury Secretary Janet Yellen, who warned that the country will hit its breaking point next month and be unable to pay its bills. On Wednesday, six former Treasury secretaries wrote to Congress urging action on the issue in the confront of “serious economic and national security harm.” Yellen has made several similar appeals in letters beginning in July, a recent Wall Street Journal op-ed and remarks and conversations with Republicans and Wall Street tycoons.

But those institutions who have sway within Republican ranks and want to see the debt ceiling raised or suspended have not in addition taken a hammer to GOP leadership for their insistence that Democrats act alone. Many of the business leaders and groups that Democrats are counting on to help convince Republicans have stuck only to declarative statements about the need for rapid action.

“The United States of America defaulting on its obligations is not an option,” said Neil Bradley, executive vice president and chief policy officer at the U.S. Chamber of Commerce. “We are counting on Congress to take the necessary steps to address the debt limit.”

Other industry organizations and companies have issued public letters and statements focused on how such votes have long been bipartisan, another point stressed by the Biden administration.

Inside the White House and among allies, there’s an overarching belief that there is nevertheless time to resolve the matter and that Americans care far less about the time of action of raising the debt ceiling than whether it gets done. A POLITICO/Morning Consult poll released on Wednesday showed that 67 percent of respondents had not seen, read, or heard about Yellen’s comments urging the debt ceiling be raised. Asked which party would be to blame if it wasn’t raised, 33 percent said Democrats, 16 percent said Republicans, and 42 percent said both.

“I think there’s no real messaging way out of this,” said Josh Bivens, director of research at the Economic Policy Institute, a left-leaning think tank.

Democrats, Bivens said, just need to find a way to raise, suspend or outright abolish the debt ceiling “and then the public will stop thinking about this issue.”

But as administration officials try to game out ways by the standoff, they are also chafing at the idea of establishing a new precedent whereby the minority party can pass off responsibility of handling the debt limit already after their own members additional to the debt. The White House argues that Congress has addressed the debt limit nearly 80 times in the last 60 years and that Republicans and Democrats alike supported the spending that has contributed to the current need to raise the limit.

“Senate Republicans are playing politics with the prospect of economic calamity and a government shutdown by pledging to vote for a extreme default,” said White House spokesperson Mike Gwin. “America cannot provide to let political brinkmanship put our economic recovery at risk, and blocking a simple vote to lift this uncertainty off our economy would be inexcusable.”

Elected Democrats are not holding back on launching broadsides at Republicans over the situation — with the national party already unloading on Senate Minority Leader Mitch McConnell. Some see danger in treating the consistent Republican threats as a fixed obstacle for the opposing party instead of something rooted in bare-knuckled political calculus or norm-shattering nihilism. Rep. Jackie Speier (D-Calif.) suggested “There’s going to be blood on their hands” if Republicans don’t acquiesce.

“Are we hostage to Republicans who are threatening to blow up a part of the economic system because they want to do that for politics?” Sen. Elizabeth Warren (D-Mass.) asked reporters Wednesday. “That is just not where we should be as a nation.”

McConnell has accused Democrats of being the ones who are playing chicken with the debt limit, warning that they are playing “Russian roulette with our economy.” And Sen. Rick Scott (R-Fla.), chair of the National Republican Senatorial Committee, suggested Wednesday that Democrats want to get Republicans on board because they fear the political blowback from going it alone. “They must have a big concern that they don’t want to do this on their own. It’ll hurt their campaigns,” Scott said.

Negotiations over raising the debt ceiling are a fairly recent occurrence. In 2011, a standoff led to a downgrading of the U.S. credit rating and a deal between lawmakers to ease spending cuts and deficit reduction. After that, Obama made his potential to never negotiate on the matter again, already as Republicans demanded concessions. His insistence worked, which has led some Democratic veterans of debt limit fights to continue to predict that Republicans will back down.

“I don’t think [McConnell] is ultimately going to filibuster the United States into default and economic catastrophe,” said Seth Hanlon, who served as a special assistant to Obama at the National Economic Council.

But on Wednesday evening, CNN reported that House Democrats had begun to concede that they may need to act alone in raising the debt ceiling by a separate reconciliation bill, which could pass the Senate with majority sustain.

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