As Washington approaches a possible June 1 US default date, the ranking Democrat on the House Budget Committee said central negotiating points in negotiations over an increase or suspension debt ceiling It is the depth and duration of future spending cuts.
“The biggest sticking point by far is the numbers,” Democratic Representative Brendan Boyle told CBS News on “The Takeout.” “The duration and severity of (spending) caps, that’s it. That’s 90% of it.”
Boyle also said House Republicans would have to abandon their push for up to 10 years of discretionary caps on domestic spending. Boyle said the White House and congressional Democrats would never agree to cuts to that term, no matter how big they were.
“Forget it,” Boyle said of the idea of spending cuts over a decade. “It’s not going to happen. The agreement has to last as long as you raise the debt ceiling. If it’s a two-year agreement on the budget, we raise the debt ceiling for two years. If it’s for one year, it’s a year for the other. That’s eminently fair. And I can’t I imagine the Democrats would accept anything less than that.”
Overall, Boyle is optimistic that an agreement can be reached soon.
He’s, I think, significantly more positive, Boyle said, now than he was a couple of days ago. “This isn’t terribly surprising because the closer we get to our ‘X-date’, the more motivated everyone is to reach an agreement.”
Boyle maintains close contact with White House negotiators and doesn’t think proposed Republican changes to energy exploration permits and recovery of billions earmarked for Covid relief or preparation are a stumbling block.
“I think there is real flexibility when it comes to this topic,” Boyle said on covid refunds. “This is not a hold-up (and) I would be shocked if things like unspent COVID money or allowing repair were the stumbling blocks.”
Boyle said Democrats and the White House have drawn a line against the GOP pushing for work requirements that could affect Medicaid eligibility.
“We support Labor as Democrats,” Boyle said. “What we don’t support is under the guise of describing something as a business requirement[becoming]a back door way to kick people out of healthcare.”
Boyle also said the expected June 1 default deadline set by Treasury Secretary Janet Yellen is real and should focus negotiators.
“June 1 is quite real,” Boyle said, acknowledging that financial analysts have suggested other possible dates in early June as the 10th date. “Do we really want to tempt fate and get into a situation where we think it’s June 3rd, and then all of a sudden wake up on June 2nd, and realize the Treasury really faltered that morning?”
Boyle also criticized Wall Street analysts for assuming that a deal would be struck to avoid default.
“Unfortunately, a lot of people in markets and Wall Street have calmed down into conviction that we will solve this problem in due course,” Boyle said. “I hope they’re right. I think it’s more likely than most that they’re right, but they don’t realize now the huge danger of not getting it done in a timely manner. They just don’t fully appreciate it. It’s dangerous.”
As for the chances of a default, Boyle describes himself as a nominally optimistic. It is believed that default is possible.
“This is without a doubt the most serious risk we’ve faced since 2011,” Boyle said, referring to an early debt-ceiling standoff that led to a brief downgrade of the US credit rating by Standard & Poor’s. “The odds of us defaulting — either by design or by accident — are well above zero. It’s less than 50%. But it’s well above zero.”
Boyle also dismissed the possibility that the Treasury would prioritize post-default spending — essentially paying some federal liabilities over others. It’s an idea floated by some Republicans
“This is a fairy tale,” Boyle said. “Magic thinking. There is absolutely no mechanism for prioritizing debt.”
Of the available options, aside from a negotiated settlement, Boyle categorized what is known as the discharge petition as “a long shot” and the use of the Fourteenth Amendment as the “least bad option.”
Boyle helped gather signatures from 213 Democrats for a discharge petition—a mechanism for the minority party to force a vote to raise the debt ceiling to the floor. However, Boyle admitted that he needed five Republicans to sign the petition to begin ground proceedings. Right now, there are no Republicans willing to cross the GOP leadership and sign the petition.
“This is a fluid situation,” Boyle said of the Republicans’ signature hunt. “With each passing day that we get closer to Date X, the pressure builds exponentially. You get to May 30th, you get to May 31st, suddenly the impending deadline can focus on minds. I always said the discharge petition was a long shot. It’s an option. It’s there. As an escape valve. I would urge (swing district Republicans) that this be your chance to be a hero and sign this petition to dump and end this potential disaster.”
Some Democrats have urged President Biden to use the Fourteenth Amendment to continue paying US debt — even without congressional authorization, which has historically been the means by which Congress and Republican and Democratic administrations have avoided default. Mr. Boyle said Constitutional scholars have told him Mr. Biden may be justified, but when the inevitable lawsuit is filed against the invocation of Fourteenth Amendment powers, the uncertainty will do economic and reputational damage. Boyle believes he should be booked as an “option”.
“At the same time, I am pragmatic and aware that there is still some damage. We will suffer economically,” he acknowledged. “There will be a question on the minds of those who buy our debt, they will be like, ‘Hey, wait a minute. Will I really get my money back? “.
However, in the absence of a deal, Boyle said using the Fourteenth Amendment would be better than defaulting.
“If I’m right up against Date X, and there’s no deal and the President calls him out, it seems to me the least bad option,” Boyle said.
However, Boyle declined to criticize Biden’s debt ceiling tactics or messaging, which some Democrats have recently criticized.
“I am literally one of the first supporters in Congress of Joe Biden,” Boyle said. “It’s always easy to criticize what any White House is doing in terms of messaging. It’s important for all of us on the Democratic side to speak out as forcefully as possible and call out Kevin McCarthy for his repeated testimony.”
The so-called “BS,” Boyle said, was McCarthy’s declaration that the concession House Republicans were willing to make was to raise the debt ceiling — but only in concert with Democrats’ concessions on spending and other policies.
“They think they’re giving up something by not blowing up the American economy,” Boyle said. “This is extraordinary behavior. It’s reckless. It’s irresponsible. What Kevin McCarthy is really saying is that he’s willing to put the political interests of himself and his party above the interest of the United States of America. I’m saying, can we just be normal and lift the debt ceiling curse, not even deal with nonsense.”
Executive Producer: Arden Farhi
Producers: Jimmy Benson, Jacob Rosen, Sarah Cook and Eleanor Watson
CBSN Produced by: Eric Susanen
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