Solving the debt ceiling dilemma with Rep. Brendan Boyle — “The Takeout”
With Washington hurtling toward a possible June 1 U.S. default date, the ranking Democrat on the House Budget Committee says the central negotiating sticking points in the negotiations over raising or suspending the debt ceiling are the depth of future spending cuts and their duration.
“The single biggest sticking point by far is simply the numbers,” Pennsylvania Democratic Rep. Brendan Boyle told 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 also said House Republicans will have to abandon their push for up to 10 years of caps on domestic discretionary spending. Boyle said the White House and congressional Democrats will never agree to cuts of that duration, regardless of their size.
“Forget it,” Boyle said of the idea 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 can be reached soon.
It is, I think, markedly more positive, now than a couple days ago,” Boyle said. “That’s not terribly surprising because the closer we get to the ‘X-date,’ the motivation increases for everybody to get to an agreement.”
Boyle keeps in close contact with White House negotiators and does not believe proposed Republican changes to permits for energy exploration and clawing back billions allocated for Covid relief or preparation are stumbling blocks.
“I think there’s real flexibility when it comes to that subject,” Boyle said 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 said Democrats and the White House have drawn a line against the GOP-push for work requirements that could affect Medicaid eligibility.
“We support work as Democrats,” Boyle said. “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 also said the projected June 1 default deadline established by Treasury Secretary Janet Yellen is real and should focus negotiators.
“June 1 is absolutely real,” Boyle said, acknowledging that financial analysts have suggested other possible 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 also criticized Wall Street analysts for assuming a deal will 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 said. “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 chances of default, Boyle describes himself as nominally optimistic. He thinks default is possible.
“This is without question the most serious danger with that we have faced since 2011,” Boyle said, referring to an early debt ceiling showdown that led to a brief downgrading of U.S. credit rating 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 also dismissed the possibility that the Treasury Department could prioritize spending after lapsing into default – essentially paying some federal obligations but not others. It’s an idea that has been floated by some Republicans
“That’s a fairy tale,” Boyle said. “Magical thinking. There is no mechanism whatsoever for debt prioritization.”
Among the available offramps, short of a negotiated settlement, Boyle rated what’s known as a discharge petition as “a long shot” and use of the 14th Amendment as the “least bad option.”
Boyle has helped collect 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 conceded he needs five Republicans to sign the petition to initiate floor action. At the moment, no Republicans are willing to cross GOP leadership and sign the petition.
“This is a fluid situation,” Boyle said 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 use the 14th Amendment to continue paying U.S. debts — even without congressional authorization, which, historically, is the means by which Congress and Republican and Democratic administrations have avoided default. Boyle said constitutional scholars have told him Mr. Biden might be justified, but when the inevitable lawsuit is brought against invoking 14th Amendment powers, the uncertainty would inflict economic and reputational damage. Boyle thinks it should 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 said using the 14th Amendment would 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 said.
Boyle, however, declined to criticize Mr. Biden’s debt ceiling tactics or messaging, which some Democrats have recently faulted.
“I’m literally one of the earliest endorsers in Congress of Joe Biden,” Boyle said. “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 said the so-called “BS” was McCarthy’s declaration that the concession House Republicans were willing to make was to raise the debt ceiling – but only in concert with Democratic concessions on spending and other policies.
“They believe they’re conceding something by not blowing up the American economy,” Boyle said. “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 email: TakeoutPodcast@cbsnews.com