Solving the debt ceiling dilemma with Rep. Brendan Boyle — “The Takeout”

With Washington hurtling towards a attainable June 1 U.S. default date, the rating Democrat on the House Budget Committee says the central negotiating sticking factors in the negotiations over elevating or suspending the debt ceiling are the depth of future spending cuts and their length. 

“The single biggest sticking point by far is simply the numbers,” Pennsylvania Democratic Rep. Brendan Boyle informed CBS News on “The Takeout.” “The duration of the (spending) caps and their severity, that’s what it’s all about. That’s 90% of it.”

Boyle additionally mentioned House Republicans should abandon their push for as much as 10 years of caps on home discretionary spending. Boyle mentioned the White House and congressional Democrats won’t ever conform to cuts of that length, no matter their dimension.

“Forget it,” Boyle mentioned of the thought of a a decade of spending cuts. “It’s not gonna happen. The agreement should be for as long as you’re raising the debt ceiling. If it’s a two-year agreement on the budget, we’re raising the debt ceiling for two years. If it’s one year for one, it’s one year for the other. That is eminently fair. And I can’t imagine Democrats would accept anything less than that.”

Overall, Boyle is optimistic {that a} deal might be reached quickly.

It is, I believe, markedly extra constructive, now than a pair days in the past,” Boyle said. “That’s not terribly stunning as a result of the nearer we get to the ‘X-date,’ the motivation will increase for everyone to get to an settlement.”

Boyle retains in shut contact with White House negotiators and doesn’t consider proposed Republican adjustments to permits for power exploration and clawing again billions allotted for Covid aid or preparation are obstacles.

“I think there’s real flexibility when it comes to that subject,” Boyle mentioned on reclaiming Covid funds. “That’s not the holdup (and) I would be shocked if things like unspent COVID funds or permitting reform were the stumbling blocks.”

Boyle mentioned Democrats and the White House have drawn a line in opposition to the GOP-push for work necessities that might have an effect on Medicaid eligibility.

“We support work as Democrats,” Boyle mentioned. “What we don’t support is under the guise of labelling something a work requirement (becoming) a backdoor way to just kick people off healthcare.”

Boyle additionally mentioned the projected June 1 default deadline established by Treasury Secretary Janet Yellen is actual and may focus negotiators.

“June 1 is absolutely real,” Boyle mentioned, acknowledging that monetary analysts have urged different attainable dates in early June as the X-date. “Do we really want to tempt fate and get a situation where we think it’s June 3, and then suddenly we wake up on June 2, and we realize Treasury actually defaulted that morning?”

Boyle additionally criticized Wall Street analysts for assuming a deal shall be struck to avert default.

“Unfortunately, a lot of the folks in the markets and Wall Street have lulled themselves into getting convinced that we will absolutely solve this in time,” Boyle mentioned. “I hope they’re right. I think it’s more likely than not that they’re right, but they don’t recognize right now the tremendous risk this doesn’t get done in time. They’re completely underappreciating it. That’s dangerous.”

As for the probabilities of default, Boyle describes himself as nominally optimistic. He thinks default is feasible.

“This is without question the most serious danger with that we have faced since 2011,” Boyle mentioned, referring to an early debt ceiling showdown that led to a quick downgrading of U.S. credit standing by Standard & Poor’s. “The odds that we default — either by design or by accident — are significantly above 0. They’re below 50%. But they’re well above zero.”

Boyle additionally dismissed the chance that the Treasury Department may prioritize spending after lapsing into default – primarily paying some federal obligations however not others. It’s an concept that has been floated by some Republicans

“That’s a fairy tale,” Boyle mentioned. “Magical thinking. There is no mechanism whatsoever for debt prioritization.”

Among the obtainable offramps, in need of a negotiated settlement, Boyle rated what’s often called a discharge petition as “a long shot” and use of the 14th Amendment as the “least bad option.”

Boyle has helped gather signatures from 213 Democrats for a discharge petition — a mechanism for the minority celebration to pressure a vote to lift the debt ceiling to the flooring. However, Boyle conceded he wants 5 Republicans to signal the petition to provoke flooring motion. At the second, no Republicans are keen to cross GOP management and signal the petition.

“This is a fluid situation,” Boyle mentioned of the hunt for Republican signatures. “As each day goes by that we get closer to the X date, the pressure increases exponentially. You get to May 30, you get to May 31, suddenly that impending deadline can concentrate minds. I’ve 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) this is an opportunity for you to be a hero and sign this discharge petition and to end this potential catastrophe.”

Some Democrats have urged President Biden to make use of the 14th Amendment to proceed paying U.S. money owed — even with out congressional authorization, which, traditionally, is the  means by which Congress and Republican and Democratic administrations have averted default. Boyle mentioned constitutional students have informed him Mr. Biden could be justified, however when the inevitable lawsuit is  introduced in opposition to invoking 14th Amendment powers, the uncertainty would inflict financial and reputational injury. Boyle thinks it ought to be reserved as “an option.”

“At the same time, I’m a pragmatist and recognize that there would still be some damage. We would suffer economically,” he conceded. “There would be a question in the minds of those who buy our debt, they would wonder, ‘Hey, wait a minute. Am I really gonna get my money back?’.”

Still, absent a deal Boyle mentioned utilizing the 14th Amendment can be preferrable to default.

“If you’re right up against the X-date, and there isn’t going to be in an agreement and the president invokes, it would seem to me to be the least bad option,” Boyle mentioned.

Boyle, nonetheless, declined to criticize Mr. Biden’s debt ceiling ways or messaging, which some Democrats have lately faulted.

“I’m literally one of the earliest endorsers in Congress of Joe Biden,” Boyle mentioned.  “It is always easy to criticize what any White House does in terms of messaging. It’s important for all of us on the Democratic side to speak out as forcefully as possible and call Kevin McCarthy on his repeated BS.”

Boyle mentioned the so-called “BS” was McCarthy’s declaration that the concession House Republicans have been keen to make was to lift the debt ceiling – however solely in live performance with Democratic concessions on spending and different insurance policies.

“They believe they’re conceding something by not blowing up the American economy,” Boyle mentioned. “That is extraordinary behavior. It’s reckless. It’s irresponsible. What Kevin McCarthy is really saying is 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 raise the damn debt ceiling and, and not even deal with this nonsense.”

Executive producer: Arden Farhi

Producers: Jamie Benson, Jacob Rosen, Sara Cook and Eleanor Watson

CBSN Production: Eric Soussanin
Show electronic mail: [email protected]
Instagram: @TakeoutPodcast

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