In the face of intense political tension, President Biden has demonstrated his commitment to bipartisanship with the fiscal deal reached on Saturday. This agreement, which raises the debt ceiling while constraining federal spending, reinforces Biden’s claim that he is the one leader who can bridge the gap in our deeply divided political landscape.
However, this compromise has not come without its costs. Many within Biden’s own party are dissatisfied with his willingness to meet Republicans halfway, fearing that he may give away too much in his pursuit of consensus. Furthermore, he now faces the challenge of rallying his fellow Democrats to support the deal in Congress. The progressive left is particularly disappointed, viewing Biden’s actions as a surrender to the hostage-taking strategy employed by Republican House Minority Leader Kevin McCarthy. Despite initially stating that the debt ceiling was “not negotiable,” Biden ultimately engaged in negotiations to avoid a national default, disregarding the pretense that spending limit talks were separate.
Progressive liberals urged Biden to take a stronger stance against Republicans by asserting the power to ignore the debt ceiling under the 14th Amendment. This constitutional interpretation argues that the validity of the government’s public debt should not be questioned. However, Biden deemed this approach too risky, as it could lead to a default while the issue was being litigated in the courts. Consequently, the recent negotiations heavily favored the Republicans’ terms, with no new Biden fiscal initiatives included in the final agreement. The focus was primarily on how much of the House Republicans’ Limit, Save and Grow Act the president would accept in exchange for raising the debt ceiling.
Nevertheless, Biden was successful in significantly reducing the impact of the Limit, Save and Grow Act, much to the dismay of conservative Republicans. Instead of a short-term debt ceiling increase coupled with hard caps on discretionary spending over ten years, the agreement now links the spending limits and the debt ceiling increase for a two-year period. While Republicans insisted on basing the limits on 2022 spending levels, adjustments in appropriations effectively align them with the more favorable 2023 baseline. As a result, the projected spending reductions over the decade will be only a fraction of what Republicans had initially sought. The Congressional Budget Office estimated that the caps proposed by House Republicans would have reduced discretionary spending by $3.2 trillion over ten years, whereas the agreement reached by Biden and McCarthy might only cut around $650 billion.
Despite not advancing many new Democratic policy goals in the agreement, Biden successfully shielded his previous accomplishments from Republican attempts to dismantle them. The Republican plan aimed to revoke various clean energy incentives, eliminate additional funds for the Internal Revenue Service to combat tax evasion by the wealthy, and block the president’s plan to forgive $400 billion in student loans. None of these provisions made it into the final package. In one example of Biden’s deal-making, he agreed to cut approximately $10 billion from the additional $80 billion previously allocated to the IRS, but the majority of this money will be used to prevent deeper cuts in discretionary spending sought by Republicans.
One contentious issue for Biden’s progressive allies was the Republican push for work requirements on recipients of social safety-net programs such as Medicaid, food assistance, and welfare payments. Biden initially signaled openness to considering these proposals, drawing fierce backlash from Democrats. However, the final agreement does not include work requirements for Medicaid. It does raise the age for individuals who must work to receive food aid through the Supplemental Nutrition Assistance Program (SNAP) to 54, while eliminating requirements for veterans and homeless individuals. The agreement also moderates Republican provisions to expand work requirements for Temporary Assistance for Needy Families.
The next challenge for Biden is to garner support for the compromise among his fellow Democrats. Just as McCarthy expects to lose potentially dozens of disappointed Republicans, the president anticipates dissent from members of his own party as well. However, Biden needs enough Democrats to offset GOP defections in order to secure a bipartisan majority. In response to the deal’s announcement, the White House promptly provided briefing materials and talking points to every House Democrat and followed up with phone calls. These materials emphasized the need for give and take in negotiations and highlighted the protection of core Democratic priorities and the economic progress achieved in the past two years.
President Biden has navigated similar challenges before as Vice President under President Barack Obama. However, this time, he is the president and the leader of his party heading into a reelection year. It is his room, and he is determined to manage it on his own terms, regardless of whether it pleases everyone or not.