The Congressional Budget Office offered a faint glimmer of hope as the nation faces an economically devastating default on the national debt, saying Friday that if the federal government can squeak through until mid-June, it can avoid default until at least the end of July.
The report by the nonpartisan fiscal forecasting office also issued a warning that there is a “significant risk” that the government will run out of money to pay its already-incurred bills if Congress does not raise the debt ceiling. That syncs with the deadline projected by Treasury Secretary Janet Yellen.
But “if the Treasury’s cash and extraordinary measures” – things the government is doing to move money around to avert a default – “are sufficient to finance the government until June 15, expected quarterly tax receipts and additional extraordinary measures will probably allow the government to continue financing operations through at least the end of July,” the CBO said in a statement.
The mixed report comes as the White House and Congress are in a high-stakes game of chicken over raising the debt limit, something Congress routinely does to ensure the government can borrow cash to pay its bills.
The rosier scenario CBO presented could give more breathing room – and time to politically posture – to negotiators discussing debt ceiling legislation. A scheduled meeting for Friday among congressional leaders and the president was postponed by an agreement “by all principals,” White House press secretary Karine Jean Pierre told reporters Friday.
She said staff members were continuing to meet throughout the weekend and that Biden, who said earlier this week he’d scrap a planned trip to Asia next week if necessary to deal with the debt ceiling crisis, intends to head to Japan Wednesday morning as scheduled.
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“There is a lot of urgency, obviously,” Jean Pierre said. But she added that “the conversations are going in the right direction.”
House Republicans are insisting that President Joe Biden and the Democratic-controlled Senate make deep cuts in non-defense spending in exchange for allowing the government to make good on its debt. Biden has said repeatedly that the budget and the debt ceiling should not be linked, although he has done it before.
As vice president, Biden negotiated a deal in 2011 to attach spending cuts to a debt limit increase. He told reporters this week he did so only because he was directed to get a deal.
While there have been proposals to do less-drastic cuts than what the House GOP passed – such as clawing back monies appropriated but unspent for COVID-19 relief – Jean Pierre shot down the idea that Republicans will get even some of what they want.
“There is no deal to be had on the debt ceiling. There is no negotiation to be had on the debt ceiling. This is something Congress needs to do,” Jean Pierre said. “The president has been very clear on that, and he will continue to do so.”
Her words suggested the White House either does not see default as imminent or that it believes progress is being made behind the scenes. Typically in standoffs such as the current debt ceiling battle, the opposing sides don’t give an inch until the final hour, so as not to weaken their respective negotiating positions.
The current looming crisis is complicated, however, by the tenuous position of House Speaker Kevin McCarthy, the California Republican who won his leadership post only after 15 ballots and an agreement to allow a “no confidence” vote if just a single member of his caucus requests it.
Jean-Pierre singled McCarthy out as the problem Friday, saying that “three of the four [congressional leaders] that met with the president on this said that default was off the table.
“I will let you guess who is the fourth who did not say that,” Jean Pierre said. Later, she added, “it’s the speaker who needs to really answer this question.”
McCarthy has a narrow majority in the House, and every GOP vote – including that of Rep. George Santos, New York Republican under pressure to resign after he was hit with a 13-count federal indictment this week.
The package House Republicans passed has no chance of getting approved in the Democratic-controlled Senate, let alone signed by Biden. But the right wing of McCarthy’s caucus, while a minority of the GOP, is big enough to stop any other deal.
“I just don’t think there is a deal the speaker of the House, Kevin McCarthy, can make with the president and the Senate, two Democratic entities, and take it back to his House majority and not put his speakership in jeopardy,” Rep. Jim Hines, Connecticut Democrat, said on MSNBC’s “Andrea Mitchell Reports” on Friday.
Voters typically blame Congress if there is a government shutdown, but it’s unclear who would bear the political pain if the nation indeed goes into an unprecedented default, which economists agree would result in massive job losses and potentially kick off a global recession.
In a recent Washington Post/ABC poll, 39% of Americans said they’d blame Republicans in Congress, while 36% said they would mainly blame Biden. Another 16% said they’d assign equal blame to both.