“Good Meeting”: How the blackmailable McCarthy made himself unpopular with the hardliners. Raised money for a sick dog and ran away? FBI investigates liar George Santos

“Show me your budget and I’ll show you mine”: It was the usual flippant tone used by US President Joe Biden when he spoke of the upcoming meeting with Republican Speaker of the House of Representatives Kevin McCarthy. This talk on Wednesday was the prelude to protracted negotiations between Democrats and Republicans, the failure of which could plunge not only the country, but the entire world, into an economic crisis.

It is only superficially about money. Almost two weeks ago, the US reached the so-called debt ceiling. This means that the state is no longer allowed to take out loans to pay bills. If this upper limit is not raised, the United States threatens to go bankrupt as early as June. Then the emergency measures that Treasury Secretary Janet Yellen immediately initiated will no longer work.

The limit: $31 trillion

Congress determines how much money the state can borrow. The amount is currently about $31 trillion. So far, the parties have managed to agree to further increase this limit if there is a risk of default. The Democrats want to do that again. But the Republicans refuse. They want to take the opportunity to blackmail the government into changing policies, agreeing only if government spending is cut elsewhere.

But to which one, even the meeting between Biden and McCarthy couldn’t answer that. Apparently, the latter did not respond to the president’s request to present him with a plan. He will not negotiate publicly, McCarthy said after the talk with Biden, which lasted about an hour and a half. But he said as much: neither health services nor social security are currently on the table. He had previously promised, “There will be no default.”

Both explanations are as dubious as they are risky. McCarthy only became a spokesman because he had made major concessions to his faction’s far-right wing. There are several MPs whose top priority in Congress is presenting the Biden administration. Few are better suited for this than a deadlock on the debt ceiling – and McCarthy would have promised them that.

For these Republicans, cuts to social services and health care would have the greatest possible effect — after all, that would hurt the Democrats the most, especially Biden, under whose vice presidency Obamacare was born. Some, in turn, have indicated that they would not agree at all with an increase in the limit, however much they could negotiate with Biden.

The powerful tool

Some Republicans in the House of Representatives may not like to hear that McCarthy is now unusually cooperative, speaking of a “good first meeting” with Biden and explaining that he can foresee “common ground being found.” And they have a powerful tool to voice that displeasure: Part of the deal for the vote McCarthy needed from his faction to be elected Speaker was a change in the House voting rules. In the future, as in the past, one MP will have the opportunity to declare a vote of no confidence against the speaker. That was the downfall of McCarthy’s Republican predecessor, John Boehner, who was urged by the right to resign in 2015. Now it could easily hit McCarthy too.

Republicans have historically used the debt ceiling as a weapon to persuade the Democrat-led White House to make political concessions. In early 2014, Boehner himself ended a debt-ceiling dispute that had been smoldering for more than a year, agreeing to a raise without concessions after Democrats stood firm and Republicans could not agree on what they wanted to demand. This move – and especially the rational political justification that the party should no longer make its internal differences a political issue – helped to avert insolvency. But he turned the right wing against Boehner and is seen as one of the beginnings of the end of his power.

A word of power like that of his predecessor – “we will not make history of ourselves” – seems unthinkable from McCarthy, who voluntarily gave up almost everything for his power. His behavior towards Biden, a kind of blackmail attempt by someone susceptible to blackmail, seems more driven by the hope that things can go back to the way they were in 2011. The White House, where Barack Obama ruled, gave way after months of arguments and voted in with cuts. Democrats felt the effects for a long time: the economy slowed and the labor market slowed, which in retrospect is considered a factor in the Democratic Party’s defeat in the 2016 election.

Millions of jobs are at risk

Looking ahead to 2024, when Donald Trump could once again be the Republican nominee, this is a particularly sensitive issue. This can be dangerous not only for the Democrats, but also vice versa for the Republicans. Should parts of his faction urge McCarthy to demand cuts to Medicare and Social Security, contrary to his current statements, they could inflict serious losses on the voters who benefit from these services. Similarly, if Republicans go to extremes, millions of jobs are expected to be lost.

A long battle over the debt ceiling could also be fatal to the international reputation of the US, even if a deal is finally reached. In 2011, the months-long dispute between the Democrats under Obama and the Republican majority in the House of Representatives – the same balance of power as now – cost the United States confidence in the financial markets in 2011. US government bonds are considered a safe investment worldwide; At that time, however, the country’s credit rating was downgraded by Standard & Poor’s for the first time in US history. And that was at a time when the country was just recovering from the financial crisis.

Insolvency would not only be domestic humiliation

For Biden, who was part of the negotiators at the time as vice president, this must have been a profound experience — and presumably why he ruled out making concessions to the Republicans this time. Calls for government spending cuts are under budget negotiations, White House spokeswoman Karine Jean-Pierre argued. “Preventing non-payment is an art in itself.” For Biden, this wouldn’t just be a domestic humiliation. It would give China, the rival power that has played such an important role in his tenure, an advantage as a resolute confrontation.

And so, in unexpected unison, both Biden and McCarthy face a task in which they both aim not to allow themselves to be blackmailed by the particularly radical Republicans in the House of Representatives. You can now use parliamentary tricks and token concessions to try and find a compromise that will allow McCarthy to survive in his group, but that won’t hurt Democrats’ policies too much or delay raising the limit too long. But this much is certain: appeals to decency and common sense will not help this time.

This article was first published on Zeit Online. Watson may have changed the headings and subheadings. Here’s the original.