Bipartisan lawmakers draft ‘Plan B’ debt ceiling proposal as negotiations stall
Cami Mondeaux
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A bipartisan group of lawmakers drafted a debt ceiling proposal that would help the country avoid defaulting on its loans and would act as a backup plan if House Republicans and President Joe Biden can’t come to an agreement.
The plan created by centrist lawmakers in the Problem Solvers Caucus seeks to suspend the debt ceiling through the rest of the year while Congress proceeds with its usual budget and appropriations process, according to a confidential draft discussion obtained by Politico. The two-page memo does not go into detail on how the caucus would implement the plan, but it alludes to a framework that would take “a reasonable, responsible bipartisan approach.”
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As part of that plan, lawmakers would propose appointing an independent fiscal commission to “address ballooning debt and deficit and put the country on a sustainable path.” The group would be tasked with submitting its policy recommendations to Congress after the 2024 presidential election, which would then be teed up for a vote no later than February 2025.
“As every well-regarded expert, business leader, and economist can attest, defaulting would potentially send our currency and markets into a free fall,” the draft states. “Our nation is also on path to substantially increase our debt to GDP ratio from current alarming levels, which is unsustainable and fiscally dangerous.”
The backup plan comes as Republicans led by House Speaker Kevin McCarthy (R-CA) work to finalize a budget proposal by next week, hoping to restart negotiations with the White House on how to address the debt ceiling. Discussions have largely been stalled over the last two months as members of both parties attempt to use the financial crisis to achieve their priorities.
While Republicans seek to negotiate spending cuts in exchange for raising the debt ceiling, Democrats have remained adamant about passing a clean debt ceiling raise — putting lawmakers at an impasse just months before the looming deadline of a default.
McCarthy unveiled a proposal to GOP lawmakers on Tuesday that would raise the debt ceiling into 2024 while making cuts to government spending. The House speaker acknowledged the plan is not complete but will act as a catalyst to kick-start discussions with Biden.
The proposal, which McCarthy hopes to bring to the floor for a vote by next week, has received mixed reactions from GOP members. However, the speaker expressed confidence it can pass, urging members to back his plan.
McCarthy met with Biden in January to begin negotiations on the debt ceiling, but that meeting ended without a binding agreement as the White House maintains it will not discuss federal spending until the borrowing limit is lifted. McCarthy said on Monday he has not spoken with Biden since that initial meeting, accusing the president of “bumbling into the first default in our nation’s history.”
However, the White House declined to continue negotiations until Republicans release their budget proposal for the next fiscal year — a talking point that has been repeatedly used by Democrats in recent weeks.
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“We will evaluate any legislative text when and if House Republicans can ever agree with themselves about how much they want to devastate American families,” House Minority Leader Hakeem Jeffries (D-NY) said.
It’s not clear whether the Problem Solvers Caucus plan would gain much traction in the House or come through for a vote. However, it is possible it will spark conversations about alternative plans to address the debt ceiling if an agreement can’t be reached.