President Biden Agreed to Meet with Speaker McCarthy to Discuss Debt Ceiling

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President Biden Agreed to Meet with Speaker McCarthy to Discuss Debt Ceiling

President Biden Agreed to Meet with Speaker McCarthy to Discuss Debt Ceiling

Congress returns this week with both the House and Senate in session.

The Senate will vote on nominations. The Senate Leadership hopes to announce and be able to ratify revised committee rosters and ratios this week.

The House is expected to consider the Strategic Production Response Act later in the week under a "modified open rule,” The bill (H.R.21) prohibits the Secretary of Energy from tapping the Strategic Petroleum Reserve (SPR) for non-emergency reasons until establishing a plan to increase oil and gas production on federal lands and waters. Notably, the Strategic Production Response Act will come to the floor under a modified open rule, which means Members can offer any amendment that is germane to the bill. The Strategic Production Response Act is only 3 pages, so the germaneness test will limit the scope of amendments, though some politically challenging amendments are expected, including one by Rep. Matt Gaetz (R-FL) to codify President Trump’s 2020 memorandum that bans exploratory offshore drilling off the coasts of North Carolina and Virginia and in the Gulf of Mexico.

The House will continue the process of organizing for the 118th Congress. Speaker Kevin McCarthy and Democratic Leader Hakeem Jeffries have agreed to ratios on all standing committees, which are consistent with an inversion of those from the prior Congress. The Republican Steering Committee filled several committee slots last week, though several others remain outstanding pending the finalization of the ratios. Additionally, Speaker McCarthy is expected to announce his selections this week for the Select Committee on Strategic Competition Between the U.S. and the Chinese Communist Party. The House Democratic Steering and Policy Committee will begin individual member placements on exclusive committees, followed by non-exclusive committees.

Debt Ceiling: Treasury Secretary Janet Yellen announced last Thursday that the Federal Government has reached the statutory debt limit and has begun to use “extraordinary measures” to avoid default. The date at which Treasury will exhaust extraordinary measures is a moving target and depends on monthly revenues and expenditures, but Secretary Yellen has indicated it could happen by early June.

President Biden agreed to meet with Speaker McCarthy to begin discussing the debt ceiling. A meeting has not yet been scheduled, though the President will meet tomorrow with Democratic congressional leaders.

There will be several steps to this process, and we expect multiple twists and turns along the way. For example, former President Trump weighed in on Friday saying, "Under no circumstances should Republicans vote to cut a single penny from Medicare or Social Security." This will add some complexity to the process of House Republicans reaching a consensus on a specific “ask” for what they want included in a debt limit deal.

The nature of the dilemma is clear: House Republicans have made clear they oppose a “clean” debt limit increase and want spending cuts included as part of any agreement, while the White House wants a “clean” debt limit increase and has said it will not negotiate on a spending cuts deal. Senate Republicans have not laid out their position.

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