Here’s how the debt crisis could end if the Biden-McCarthy talks fail

“If they can’t go anywhere, there are several choices, aren’t there?” Sen. John Hickenlooper (D-Colo.) Said of Biden and McCarthy. But he’s not ready to put on his bipartisan gang gear just yet: “I’m a little more fiscally conservative than some Democrats.” But that’s not where you negotiate that.

If McCarthy and Biden’s talks break down, that would seem to leave the centrists in a strong position. Senate Minority Leader Mitch McConnell (R-Ky.) Stepped aside and indicated McCarthy was leading their party, meaning his moderates are also stepping aside to avoid undermining the speaker. In short, don’t expect any of the Senate’s often active bipartisan groups to rush just yet.

Yet, sen. Joe Manchin (DW.Va.) met with McCarthy and a handful of senators are informally discussing possible solutions to the debt limit. Other centrists are moving more formally: A group of House moderates met for the first time last week to discuss loopholes if Congress gets too close to breaching the debt ceiling, which is potentially set to reach in June.

Their discussions, according to three people who knew them, included the long-term option known as a discharge petition – which requires a majority of the House to force a vote on the debt limit against the speaker’s wishes. .

“The goal is to not have that,” the rep said. David Valadao (R-Calif.) spoke about any potential fallback plans, before adding, “We’re in a dire situation.”

This will only get worse as the weather warms, and with it the risk of default. And don’t pass up Congress pushing the box one step further, perhaps tying the debt deadline to when government funding expires at the end of September.

But when it comes time to strike a deal, there are plenty of players waiting in the wings to help or supplant the chairman and president.

The Senate Gang

In the last Congress, a roving group of Senate centrists struck a series of seemingly unlikely deals on same-sex marriage, infrastructure and gun safety. Currently, there is no such movement on the debt ceiling.

But that could well change. And some senators are open to forming a group to tackle heavy tax issues – once the debt ceiling is raised.

“I would be more than happy to do that, honestly. That’s what it will take. Take the debt limit issue out, because it’s playing with fire,” said Sen. Jon Tester (D-Mont.). “I’m more than in favor of deficit reduction. It should be separate from the debt ceiling.

While there is a real possibility that Congress will eventually come together, few want to admit it now. Sen. Mitt Romney (R-Utah), a frequent member of the House’s bipartisan gangs, said “the Senate isn’t really talking about getting involved at this point.”

“This is not a gang discussion,” Michigan Sen said. Debbie Stabenow, a member of the Democratic leadership of his chamber. “Not on whether or not we’re going to collapse the economy.”

The big reason there’s no gang right now: Most Democrats argue that raising the debt ceiling shouldn’t be up for negotiation, period. And Republicans believe their position will erode if the centrists begin to break ranks with the GOP’s current stance of leaving things to McCarthy.

Rogue House Negotiators

House moderates have been eyeing a possible major role in the volatile debt talks since the GOP’s slim four-vote majority was sealed in November.

Now that there is an empowered bloc of moderates on both sides, the Bipartisan Problem Solvers Caucus is forcing its way into the talks. While the full group has yet to meet, a small group of its leaders met last week to begin preliminary discussions.

People familiar with the meeting made it clear that the problem solvers did not intend to preempt their respective party leaders, but pointed to early conversations about possible spending caps or broader budget reform that could prove useful when the negotiations start in earnest.

“We should just set a clean debt limit. That may not be realistic given where the Republicans are,” Rep. Scott Peters (D-Calif.), who has drafted a bill in recent years with the current budget chairman Jodey Arrington (R-Texas) who offered several ideas to Congress to avoid semi-annual debt from the brink.

And if the McCarthy-Biden talks die out, Peters said this bipartisan House cohort wants to be prepared: “There’s a group of people here who want to be prepared.”

Some problem solvers expect the group to eventually launch a dedicated internal effort to tackle debt, as they have done with other policy ideas, such as infrastructure. A big topic likely to be discussed – how to force a debt ceiling bill to the floor that doesn’t have uniform GOP support.

The idea of ​​a discharge petition is floated, though some Hill aides and budget pundits consider that route too slow and cumbersome to accommodate a rapidly changing default deadline. Some members are also discussing procedural gambits that would take less time to introduce a bill, such as a House motion for a “previous question,” which has much looser rules.

Mitch McConnell

The Senate GOP leader successfully negotiated a debt ceiling easing with then-Vice President Biden more than a decade ago, leading to a decade of spending limits that have reduced both defense spending and domestic spending. McConnell also reached a deal in 2021 with the Senate Majority Leader chuck schumer that allowed Democrats to advance a $2.5 trillion debt ceiling hike with a simple majority.

But his work on that debt deal, as well as the government funding deal in December, spent big political capital and earned him some criticism. So despite McConnell’s much-vaunted negotiating pedigree with Biden, he is currently refusing to enter negotiations and leaving things to McCarthy — who has criticized several bills McConnell supported in the last Congress.

“There’s no way the House will agree to something that 60 senators vote on on a bipartisan basis,” the senator said. John Corny (R-Texas). “It is [McConnell’s] position.”

Some believe that as Republicans offer a variety of budget concessions with no clear blueprint or unifying potential — including another set of spending caps and debt-to-GDP spending targets — the GOP leader may again have to step in. . McConnell and Biden have maintained their uniquely productive relationship throughout this year, appearing together at an infrastructure event last month in Kentucky.

“I can’t imagine there would be a major deal here and Mitch McConnell won’t be part of it,” Rep. Tom Cole (R- Okla.). “I suspect he will be involved in negotiations when he sees fit.”

But not yet. Even talking about McConnell’s involvement “would be detrimental” to McCarthy during interviews with the president, the senator. Kevin Cramer (RN.D.) said, “I think we better stick with him as the main sled dog.”