With each passing day, does the odds of something really bad go up? Yes. And it also depends how you go over the debt limit and how long, if you go over for 2 hours, is calamity going to happen after 2 hours? Probably not. Jason Furman: "There's a lot of uncertainty. So it's going to be a really, really tall order for everyone to try and reach agreement here." It's a very high partisan situation here. For example, members such as Santos, how they will play into another effort to pass another bill that would be more on a bipartisan basis to reach a deal between House Republicans, and President Biden could move through the House. Now we have a House member, George Santos of New York, who has run into some legal troubles. I mean, by a matter of just less than a handful of votes. margin that House Republicans deal with, McCarthy passes partisan Wishlist by a vote of 217 to 215. So, they're going to have to overcome a lot to get on the same page. McCarthy is a much less familiar opponent for Biden when it comes to negotiations. These are much more partisan times since 2011, and both sides are very much more entrenched in their corners. You need to agree to some cuts, some changes in terms of what their opening offer is with this Republican bill that they passed recently. "All the Republicans are lining up behind him. The difference this time is, McConnell says I'm not a major player here, to President Biden. McConnell in the Senate, but they help broker this last-minute deal. Now, two of the parties involved then are involved today. credit rating was downgraded for the first time for even getting that close. And as you note, it came so close to the ceiling, you know, within days, within hours of that ceiling, the U.S. How is this situation similar or different from 2011?Ĭlaudia Grisales: "It is similar in that we're seeing divided government and we're seeing quite the standoff. The government came within 72 hours of default. In 2011, when Barack Obama was president, there were negotiations over the debt ceiling. So a really clear indicator in terms of how far apart they were even just going into this first major meeting yesterday." They called it a ransom note to the American people. Act, signaling that it was not going anywhere. Democrats dubbed the same bill the Default on America Act or D.O.A. And just to show you how far apart both parties were. "It would raise the debt ceiling by $1.5 trillion or until March of next year, whichever happens first. Now, we should also note this bill that was finally passed in April, it was called the Limit, Save, Grow Act. So they spent weeks they spent months waffling back and forth in terms of one side not detailing enough for the other to start these negotiations. And so that gave the president and that gave House Speaker McCarthy a much tighter window to get together. "And so that didn't come until towards the end of April. Where do you want to start in terms of these talks, and where are House Republicans? Well, they didn't pass their bill with their partisan wish list on what kind of spending cuts, what kind of levels they would like to see over the next decade, and what programs could be rolled back, for example, such as unspent COVID relief dollars. And Biden said, I want to see your offer on spending, on the budget. When you look at the beginning of the year, Biden and McCarthy had not even met. Interview HighlightsĬlaudia Grisales: "Where they started, they were really far apart. Loeb University Professor Emeritus at Harvard Law School. Former Domestic Policy Director and Deputy Chief of Staff for Senate Republican leader Mitch McConnell. Rohit Kumar, principal and co-leader of PwC’s National Tax Services practice. Spent eight years as a top economic advisor to President Barack Obama, including as deputy director of the National Economic Council during the 2011 debt ceiling negotiations. Jason Furman, Aetna professor of the practice of economic policy at the Harvard Kennedy School. GuestsĬlaudia Grisales, congressional correspondent for NPR. Today, On Point: What’s the path forward? We hear lessons from America's last debt ceiling crisis. In 2011, the country came within 72 hours of that happening. debt limit is pushing the country perilously close to default. Sign up for the On Point newsletter here.Ī political stand-off in Washington on the U.S.
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