The White House is preparing to meet with congressional leaders early this week on debt ceiling negotiations, but time is running short to hammer out a deal.
One potential negotiating point is an overhaul of the nation’s permitting system, an effort that both parties have been eyeing the past several months.
Whether that chip is played in a final deal remains an open question, but as high-level talks continue at the White House, the Senate this week will separately hold a major hearing on permitting reform.
Despite the cancellation of a Friday meeting between the top negotiators on the debt limit, administration officials nevertheless projected optimism.
“The conversations are constructive between all of the parties,” Deputy Treasury Secretary Wally Adeyemo told CNN’s “State of the Union” on Sunday.
He said President Joe Biden was looking forward “to getting together with the leaders to talk about how we continue to make progress,” adding that “the United States has never defaulted on its debt.”
Meetings between congressional staff and White House aides are also taking place. When asked by reporters Sunday whether the meeting of congressional leaders would happen Tuesday, Biden said, “I think so.”
The planned Oval Office gathering comes as Republicans continue to demand steep budget cuts in exchange for raising the government’s borrowing authority in the next few weeks — or risk an unprecedented default that would likely result in severe economic consequences.
The Treasury Department has estimated that the debt limit could be breached as early as June 1, leaving little time to clinch a deal.
“The House position is very clear,” Rep. Byron Donalds (R-Fla.) said on “Fox News Sunday.” “Let’s go to pre-Covid spending levels.”
Republicans are seeking, among other things, to dial back funding to fiscal 2022 levels, which could mean about $130 billion in cuts.
The House-passed “Limit, Save, Grow Act,” H.R. 2811, does not specify which agencies or programs would bear the brunt of those cuts, though Republicans have in the past proposed deep spending reductions to EPA and the Department of Energy.
The debt limit bill also includes Republicans’ major energy and permitting overhaul package, H.R. 1, the “Lower Energy Costs Act.”
Getting firm numbers on GOP spending priorities had been widely anticipated — especially as a way to combat Democratic messaging on cuts.
Indeed, the GOP-led House had planned to mark up fiscal 2024 appropriations bills this week, but as of Sunday evening, no plans had been announced to do so.
House leaders last week scrapped markups for the annual National Defense Authorization Act, which is now in limbo as debt ceiling talks continue.
The White House talks are expected to include Biden, House Speaker Kevin McCarthy (R-Calif.), House Minority Leader Hakeem Jeffries (D-N.Y.), Senate Majority Leader Chuck Schumer (D-N.Y.) and Senate Minority Leader Mitch McConnell (R-Ky.).
‘We have a proposal’
Democrats continue to insist on a “clean” debt ceiling hike, arguing it should be kept separate from negotiations on fiscal 2024 spending.
Rep. Ro Khanna (D-Calif.) pointed to the White House’s $6.8 trillion budget proposal, noting it would impose a 25 percent minimum tax on billionaires and make strategic cuts in defense spending.
“We have a proposal,” he said on “Fox News Sunday.” “We just wanted to first pay our bills before implementing our proposal.”
Congressional Republicans have insisted that any debt limit hike must be paired with spending cuts and other reforms.
Nevertheless, Biden said last week he would be open to clawing back some unspent Covid-19 relief money, a major ask from Republicans. Negotiators are discussing recouping some $30 billion in funds, according to the Associated Press.
Some have called on Biden to act unilaterally to raise the debt limit, but the administration has been cool to the idea. Biden last week said he was “considering” using powers under the 14th Amendment, but acknowledged it would face an uncertain path.
As talks continue to play out, a key McCarthy ally told reporters last week that there has been an early willingness to consider permitting as a bargaining chip.
Permitting talk abounds
Rep. Garret Graves (R-La.) put the odds that permitting could be included in a final debt limit deal as “better than a 50-50.”
But at this point, Republicans and Democrats remain fairly divided on the particulars of a proposal to overhaul the nation’s permitting process for infrastructure and energy projects.
Still, there is some optimism that both parties could narrow the gap, time permitting.
Already, Senate committees have held multiple hearings, and Democrats and Republicans both talked up the “bipartisan spirit” of the discussions.
This week, the Senate Environment and Public Works Committee will convene a hearing titled, “Federal Actions to Improve Project Reviews for a Cleaner and Stronger Economy.”
The witnesses include three Biden administration officials, including Christine Harada, executive director of the Federal Permitting Improvement Steering Council.
EPW Chair Tom Carper (D-Del.) has said he plans to draw up his own permit legislation changes in the coming weeks.
His bill will add to several already out there: They include the GOP-led H.R. 1, the “Spur Permitting of Underdeveloped Resources (SPUR) Act” from Energy and Natural Resources ranking member John Barrasso (R-Wyo.), the “Revitalizing the Economy by Simplifying Timelines and Assuring Regulatory Transparency (RESTART) Act” from EPW ranking member Shelley Moore Capito (R-W.Va.), as well as ENR Chair Joe Manchin’s (D-W.Va.) “Building American Energy Security Act.”
Manchin, who led a failed permitting reform overhaul last year, said last week his goal is to pick and choose elements of all the bills — with the goal of getting a piece of legislation to the Senate floor by the summer recess — if it’s not part of a debt deal.
That’s an ambitious timeline, but Manchin was adamant: “We are going to get it done.”
The Biden administration reaffirmed last week that the president would sign a compromise permitting overhaul bill should it reach his desk. But adviser John Podesta said the White House position remained that it should not be part of the debt discussion.
The president and many Democrats have also slammed Republican proposals to repeal broad swaths of the Inflation Reduction Act in exchange for raising the debt ceiling. Indeed, Senate Finance Chair Ron Wyden (D-Ore.) will hold a hearing this week to highlight their benefits.
Schedule: The Senate EPW hearing is Wednesday, May 17, at 10:15 a.m. in 406 Dirksen and via webcast.
- Brenda Mallory, chair, Council on Environmental Quality.
- Christine Harada, executive director, Federal Permitting Improvement Steering Council.
- Jason Miller, deputy director, White House Office of Management and Budget.
Schedule: The Senate Finance hearing is Thursday, May 18, at 10:15 a.m. in 215 Dirksen and via webcast.
- Katie Harris, legislative director, BlueGreen Alliance.
- Daniel Simmons, principal, Simmons Energy and Environmental Strategies.
- Philip Rossetti, resident senior fellow for energy, R Street Institute.
- Patty Horvatich, senior vice president for business investment, Pittsburgh Regional Alliance.