The GOP’s willingness to court economic disaster without major spending cuts leaves White House aides in a bind
that his caucus broadly backed, and GOP leaders hope to pass it in the House next week. There’s little indication yet that Republicans will break off and agree to lift the debt ceiling without conditions, as Biden insists. And attempts by the administration to enlist corporate executives to build pressure haven’t yielded much either, at least not yet.
Biden has welcomed the possibility of negotiations with McCarthy on government spending levels — talks that could resolve the debt ceiling debate while allowing the administration to claim it is not negotiating over the nation’s spending limit. The person familiar with the White House’s thinking said “they are going to have to start having conversations on budget and spending, as the president has all along.
“If we do actually start to get close to the drop dead date, and you can’t pay the bills, I’m sure we’ll see a reaction in financial markets and people will put pressure on Republicans for trying to wreck the economy,” said Dean Baker, a White House ally and economist at the Center for Economic Policy Research, a left-leaning think tank. “If we get to that point, you’ll see them backing down.”
White House aides may have less time than they anticipated. An economic slowdown could lead to less revenue coming into the Treasury Department, which would hasten the deadline. While acknowledging the data was preliminary, Goldman Sachs analysts said earlier this week that “weak” tax collections in April suggested that the debt limit could be reached in the first half of June, earlier than initially forecast.
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