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The Case for Debt-Ceiling Optimism

As the government teeters on the brink of default without a deal to lift the debt ceiling, an unlikely source of reassurance has emerged.

“I think everyone needs to relax,” Mitch McConnell told reporters in his home state of Kentucky on Tuesday. “The country will not default.” The longtime Republican leader, who once boasted The Senate “Grim Reaper” isn’t known for his soothing bedside manner. His indifference was hard to reconcile with the mood emanating from the Capitol that day as Republican House negotiators accused their Democratic counterparts in the White House of being intransigent and insisting that the sides remain wide apart.

The Treasury Department has said the government could default for the first time as early as June 1 if Congress doesn’t raise the country’s borrowing limit. The economic impact could be catastrophic – first a market crash, then, economists believe, a recession. Since it would take the House and Senate at least a couple of days to approve an agreement President Joe Biden is making with Speaker Kevin McCarthy, the actual deadline could be even earlier.

But McConnell, who has spent nearly half of his 81 years on Earth in the Senate, hasn’t just endured a few difficult negotiations. Despite all the theatrics – the censoring remarks, the “red lines” Each side has drawn that glitches and “breaks” — the talks so far haven’t looked much different from previous date dances in Washington, which usually end in an agreement. “It’s not that unusual,” McConnell said.

The public spat is actually a good sign, and in a way, so is the delay. “You have to see this through to the last minute,” Brendan Buck, a former aide to speakers John Boehner and Paul Ryan, told me. For Buck, the theatrical altercations between Republican and Democratic leaders are a necessary precursor to an agreement because they show the partisans on their respective sides that they fought as hard as they could before reaching a compromise.

Biden and McCarthy are trying to find a solution that can enforce both a Republican-controlled House of Representatives and a Democrat-controlled Senate. A quick and orderly settlement is likely to be viewed with suspicion by both parties, particularly the far-right faction of the Republican Party, which led McCarthy to muster 15 votes for speaker. “There’s no way McCarthy walked in two weeks ago, had an hour-long meeting with the President, and then came out and said, ‘We have a deal,'” said Matt Glassman, a former congressional adviser who is now a senior fellow with the government Affairs Institute at Georgetown University, told me. “That would simply be deadly for him with his conference.”

Today’s impasse is over comparisons on the debt ceiling negotiations in 2011 between Boehner and then-President Barack Obama. Those conversations included even more drama, including the sudden collapse from a “big deal” and later from a worry Prime time address to the nation of Obama. While the two parties have since drifted farther apart (thanks largely to the Republicans’ rightward swing), the gap between them in these negotiations is much smaller.

At the time, Obama aggressively pushed for tax increases while Boehner called for multitrillion-dollar spending cuts, including sweeping changes to benefit programs. This time, Biden initially took a tougher line, refusing for months to include McCarthy in debt ceiling negotiations. But since resign from this positionHowever, he has made only half-hearted attempts to get McCarthy to raise taxes or make any political concessions – and was quick to rebuff them. To the disappointment of progressives, he even appeared willing to tighten job requirements for people on federal benefits. Republicans, for their part, have agreed not to seek cuts to Medicare or Social Security. “I actually don’t think it’s that difficult to get a deal,” Buck said. He said getting that deal through the House and Senate will be more difficult, which is why both Biden and McCarthy will have to take the biggest deadline pressure off voting themselves.

According to most reports, the parties are primarily haggling over whether to freeze government spending at current levels – Biden’s latest offer – or cut up to $130 billion by returning to 2022 spending, as Republicans have proposed . Republicans want to exempt the Defense Department from any cuts, which is a sticking point for Democrats.

Given the yawning philosophical differences between the parties, it is few a gap. “Compromising on numbers isn’t that hard,” Glassman said. “It’s not like compromising on abortion.”

Take a closer look and there are other reasons for optimism. Although some of McCarthy’s members are urging him to stick to the conservative provisions of the debt ceiling law that Republicans narrowly passed last month, the speaker has backed away from those demands. Even the explosions were timed, intentionally or accidentally, to avoid spooking investors and unsettling stock markets. The meetings between McCarthy and Biden at the White House, for example, all took place after the market closed, and that biggest glitch The talks took place (so far) over the weekend before negotiations resumed on Monday.

Republicans have many reasons not to cause a stock market crash; The simplest is that they and many of their constituents would lose a lot of money. Another possible reason is that party leaders, and McConnell in particular, seem to realize that panicking about the debt ceiling is not in their political interest and could undermine their negotiating position.

McConnell is not a fortune teller – he is forecast The fact that Donald Trump’s influence on the GOP would loosen, for example, did not quite work out. His confidence that the country will avert a default is not just a prognosis of an uninterested observer. If McConnell says that, he must think it will benefit Republicans if he does so.

But even a self-serving reassurance is another hint of hope, a sign that Republicans want to avert an economic catastrophe. A debt ceiling agreement between Biden and McCarthy remains likely. It might just be a few more days before that happens.

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