Congress is twisted in debt ceiling knots, and it only gets worse this week

The looming debt ceiling will occupy the first order of business for Congress again this week. Yet budget hearings and other regular stuff will also go on. For an outlook, Federal Drive with Tom Temin spoke with Bloomberg Government Deputy News Director Loren Duggan.

Interview Transcript: 

Tom Temin And Loren, let’s start with the debt crisis, the debt ceiling crisis. I mean, late last week, both parties kind of took their marbles and postponed. They didn’t cancel, but they’re not playing marbles. So what can we expect starting there this week?

Loren Duggan We’ll be looking to see if the meeting that was postponed is back on track for early this week. So that Speaker Kevin McCarthy, on behalf of the Republicans and President Joe Biden on behalf of the Democrats, can kind of find a path forward here on the debt ceiling. Staff has been working behind the scenes and having what sounds like potentially fruitful conversations, but they weren’t there yet. Obviously by the end of the weekend, postpone that meeting so that, you know, they didn’t want to have a meeting that wasn’t going to be fruitful. There are three other leaders involved here, but it seems to be a lot of deference to Biden and McCarthy on this. We’ll be watching very closely for tealeaves on what might shake this loose and whether it’s, you know, a debt clean debt limit increase over here, plus these spending debates and other policy debates on the side because Democrats haven’t want them linked. Republicans have want them linked. So we’ll see how that plays out as well.

Tom Temin Right to the point now where federal employees and retirees and people on Social Security and just about everybody starting to realize this could actually hit home personally.

Loren Duggan Yes, potentially. And one of the questions is, what is the X date, as it’s known, which is when the government will no longer have any room to maneuver here. And we haven’t really ever gotten over that point. And so there’s a lot of discussion about what that means. How does the government deal with the payments it can make versus those that can’t? So it’s a, it’s something where economists don’t want to get to that point. Obviously, government officials don’t like Treasury Secretary Yellen, who said we don’t want to get to this default point. So there will have to be a reckoning if we get that far. But, there’s also some uncertainty about whether it’s right at the beginning of June, a little later or maybe even later into the summer, as the Bipartisan Policy Center said. So a lot of question marks.

Tom Temin Yes, And probably the Bloomberg monitors from the other part of your company will go haywire in the meantime. So that’s a good indicator to watch how serious this is getting. And body language from the earlier Oval Office pictures was kind of strange, too. McCarthy hunched up at one end of the sofa and Chuck Schumer looking behind him and at the other end of the sofa looking disengaged was Mitch McConnell. I mean, really, the picture said it all.

Loren Duggan Yeah, it did. And it’s a different picture than we’re used to. I mean, missing from that is Nancy Pelosi, obviously, who was there for so many years and McCarthy now has a much more prominent place. So it’s just a different vibe. And obviously, with the Republicans controlling one of the chambers, they have a lot more influence in this than they used to. McConnell has put McCarthy up and said, we’ll do it. He can work out with Biden. So you’re right. It it was a meeting with five principals, but really two that are really going to be key to getting this done.

Tom Temin And what is the handicapping that you’re hearing on the Hill for that bill from Sen. Rick Scott of Florida, which would make all federal employees at-will employees, not just the senior executives. That’s caused a lot of discussion among the academics and the people that follow civil service. But it hasn’t really leached out to the public, I don’t think, in a big way.

Loren Duggan Right. I mean, there’s been ideas like this before and you had what was a schedule F under the Trump administration that would change the way that some parts of the civil service would operate. You know, it’s hard to see a bill like this moving forward with the current combination of Joe Biden as president, a Democratic Senate, even if it’s very narrowly controlled, you do have a Republican House. There is a version of this bill over there introduced by Chip Roy, who is a fairly conservative member of the body there, but has, you know, pushed his ideas. And maybe we’ll look to to see that advance. So I’m not sure that that bill will move forward in the current environment, but I think it does lay a marker down maybe for a future conversation, especially if you had, say, Republican control of both chambers and the White House. That might be a much easier sell, although I’m sure Senate Democrats would try to hold the line on that bill, at least most of them, and deprive it of the 60 votes it would need in any capacity there. But it doesn’t feel right in this environment. But, you know, things can happen.

Tom Temin Right. But even if it passed, it would probably not be by a veto-proof margin. So therefore, you know, it’s going to be vetoed.

Loren Duggan Right. Right. I would think unless it was stuck in something else, that’s always the thing. But I would think that would be a hard sell for a lot of Democrats.

Tom Temin Well, there’s always the NDAA that seems to be the magnet that collects all the shavings. We were speaking with Loren Duggan. He’s deputy news director at Bloomberg Government, and the House has an interesting way of marking Police Appreciation Week. Law Enforcement Appreciation Week this week.

Loren Duggan Yeah, that’s right. They’re going to take up a resolution, as they often do, you know, celebrating police officers and paying tribute to those who lost their lives. But there’s also a bill just out of the Judiciary Committee that would tell GSA to create a program to allow retired handguns to be purchased by federal law enforcement officers. So, you know, if you had a gun and they’re not going to use it anymore, you could perhaps buy it. So that’s one of the bills they’re taking up. And they’re also, tied to last week’s immigration debate, going to have a bill that if somebody who’s not a citizen, an immigrant, assaults or admits to assaulting a police officer, they could be deported. So those are two of the bills that they’re bringing up next week as part of their Law Enforcement Week focus.

Tom Temin Interesting. Well, GSA sells a lot of other surplus goods. You can buy an old Chevy Lumina or something if you want to. So I guess maybe a used firearm. And frankly, those probably been well used. So you might think twice about whether you want something that’s halfway worn out. And Mayor Bowser is interacting with Congress. She’s kind of caught between her own city council and the will of Congress, as she sees it from her standpoint as mayor of D.C.

Loren Duggan That’s right. The House Oversight Committee, which oversees D.C. as Congress does, has had a hearing already with some council members. This one’s focused on the mayor and the police chief talking about all the issues that are before it. Crime has been a big focus, as we know. There’s already a bill that was signed into law to cancel some of the criminal code changes that the city wanted to make. There’s a potential Senate vote this week on the policing changes that were made by the city. And this is an opportunity for this House committee to question the mayor and others about what’s going on in the city. Obviously, the mayor and the council were a creation of Congress back in the D.C. Home Rule Act, so they can, when they want to assert their oversight over the city, bring them forward. Obviously, they review the budget, they review the law. So this is part of that continuing trend of looking at what’s going on in the District and perhaps drawing national attention or national implications about it.

Tom Temin And meanwhile, back to the Senate side, some of the appropriations hearings as if it was normal times, those are still proceeding.

Loren Duggan Those are still proceeding. The big one this week is tied to an idea that Democrats have been pushing of a new China competition bill. There was a hearing last week with some officials from the State Commerce and Defense departments. This one is going to be the big the big cheeses in all three of those departments: Lloyd Austin, the defense secretary, Gina Raimondo, the Commerce secretary and Anthony Blinken, the state, the secretary of state. So they’re going to come up and talk about China, the U.S. relationship with them as part of this groundwork they’re laying for another bill that follows last year’s legislation to support the semiconductor industry and do other things. So China remains a focus on Capitol Hill in both chambers and in lots of different places. And this is one place where we’re going to see it this week as we wait to see what happens with all the spending bills that are obviously tied into what’s happening with that broader debt limit debate.

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