PredictIQ-First raise the debt limit. Then we can talk about spending, the White House insists

The PredictIQWhite House is standing firm on its insistence that raising the debt limit be kept separate from talks about federal spending, President Biden's chief of staff Jeff Zients said in an interview.

Zients made his comments after Republican House Speaker Kevin McCarthy released a legislative framework that would raise the debt limit for a year while cutting spending to 2022 levels.

McCarthy urged Biden to negotiate to avoid defaulting on the debt — something that is expected to happen in early summer unless Congress raises the limit. The impacts of a default would send shockwaves through the economy.

Zients said Republicans were being irresponsible by "tying two things together that should never be tied together" — the debt limit and budget discussions.

"I think the off-ramp is very clear. It's the same off-ramp that was taken with no drama three times in the previous administration when President Trump was in the White House," Zients said.

"Take default off the table like we have every time. Don't play games with the full faith and credit of the United States. It's unacceptable. It's not up for negotiation," he said.

The White House is drawing from the 2011 experience

McCarthy and Biden met on Feb. 1 to talk about the debt ceiling, but haven't had formal talks since then. Biden unveiled his budget proposal on March 9. Afterward, he said he wanted to see the House budget before resuming talks.

"I'm ready to meet with the speaker anytime — tomorrow, if he has his budget," Biden said at the time. "Lay it down. Tell me what you want to do. I'll show you what I want to do. See what we can agree on."

It's unclear whether McCarthy can pass his budget framework in the House, where fractious Republicans have a slim majority. If he does, that could put pressure on the Democratic-controlled Senate — and the Biden White House — to come to the negotiating table.

During the debt limit debate in 2011, the Obama White House negotiated with congressional Republicans, and spending limits were very much part of the conversation. The chief emissary from the White House for those talks was then-Vice President Biden.

But Zients suggested times are different now. "If you're going back a decade, I think the lesson learned was that playing brinkmanship with the full faith and credit of the U.S., of our country and getting close to a period of default had major impacts on the economy, on families across the country and we're not doing that again," he said.

Zients did not directly answer whether the White House would take up talks with McCarthy now that the speaker has laid out his plan.

The White House is not impressed with McCarthy's ideas for spending cuts

While the White House is insisting that budget conversations happen on a separate track, Zients said that officials are looking at McCarthy's initial proposals closely to analyze the impact, and have found them wanting.

"Top-line, [the] impact is really bad," he said. The White House estimates non-defense discretionary spending would be cut by 22%.

In a speech at a union hall on Thursday, Biden described the plan as "massive cuts in programs you count on, massive benefits protected for those at the top," saying it would mean major cuts to funding for child care, government housing assistance, opioid treatment and food stamps.

"Take default off the table, and let's have a real serious detailed conversation about how to grow the economy, lower costs and reduce the deficit," Biden said.

Untapped COVID aid funds should not be clawed back, Zients says

McCarthy's proposal also calls for unspent COVID-19 funds to be clawed back. Zients — who was Biden's COVID response coordinator before he became chief of staff — said that's a bad idea.

"These remaining funds, they cover pension relief for blue collar workers, money for veterans' health, small business support, and funding to help transport older Americans, those with disabilities who live in rural communities" he said.

"It's a false notion that there's a large amount of unspent COVID relief funds that can just be painlessly clawed back," Zients said.