White House regroups after McCarthy’s debt ceiling success stuns them

President Joe Biden spent four months challenging Republicans to do one simple thing when it came to the debt ceiling: Show a plan.

Now, House Republicans’ narrow Wednesday passage of a debt limit bill packed with spending cuts and conservative priorities is forcing Biden to shift tactics.

That vote is kicking off a new phase in the high-stakes standoff that will test Democrats’ ability to stay united — and follow through on their threats to make vulnerable GOP lawmakers pay for supporting a politically toxic plan.

The White House and congressional Democrats are preparing to ramp up attacks on House Republicans over the bill, targeting swing-district members for endorsing policies that would strip investments in their home districts and gut funding for popular programs. Biden’s party insists it’s feeling little pressure to now deliver on House Speaker Kevin McCarthy’s biggest ask — a true negotiation over the debt ceiling.

"If you reward hostage taking, it simply repeats," said Sen. Chris Coons (D-Del.), a close Biden ally. "I don't expect the president to now say, 'Oh my gosh, you passed a bill with two votes that imposes draconian cuts across programs that most Americans would never support. Now I have to come and give you whatever you want.'"

Biden is refusing to budge from his demand that Congress pass an unconditional increase to the debt ceiling, betting that he still holds the stronger hand in the face of an economic catastrophe. And while a smattering of moderate Democrats have begun urging the president to actually negotiate with Republicans, the majority of the party seems content with showcasing a GOP bill they see as a self-inflicted wound in swing seats.

But Democrats’ public confidence that they’re winning the messaging war masks private concerns over how this all ultimately ends — and what damage the standoff may do to a fragile, recovering economy that’s critical to Biden’s case for re-election.

Biden allies had expected McCarthy’s bid to pass a sweeping debt ceiling bill to fail, especially after watching him struggle to win the speakership and quickly abandon his plan to construct a full budget proposal. Even the Republicans understood the skepticism directed at them with the thin majority.

“Nobody thought we would have this. Nobody thought we could get together and get anything to [the Senate],” Rep. Ralph Norman (R-S.C.) said in an interview Thursday. “If they want to say it's not good enough, then I'm sorry that they’re doing that to the country.”

But once it became clear that McCarthy lacked the influence to wrangle his conference, they reasoned, Republicans would lose most of their leverage and eventually soften their demand for concessions. The White House had harbored doubts about the bill’s chances of success even after McCarthy announced plans for a vote, privately questioning whether he could win over the last handful of conservatives trying to push the bill further to the right.

The speaker only had room to lose a handful of members. “Maybe he'll eventually get it, but boy, who knows what they’ll have to put in it,” one adviser close to the White House said on Wednesday morning, as McCarthy raced to lock down the votes he needed.

Yet after the speaker pulled it off, notably winning broad support from his conservative wing, the dynamics shifted. An emboldened McCarthy vowed to make the next several months far more complicated for the White House than aides had initially hoped.

“No clean debt ceiling is going to pass the House,” McCarthy said to reporters on Wednesday as he did a victory lap.

In the aftermath of the vote, Biden allies and advisers privately acknowledged that there's no clear endgame to the debt ceiling standoff — and that McCarthy's victory makes it more difficult to convince moderate Republicans to back a clean debt ceiling increase for fear of economic disaster.

The White House signaled that Biden would now be willing to meet with McCarthy for the first time since early February — while sticking to their longstanding position that any negotiations be over the broader federal budget, and not the debt ceiling.

"I don't think that it should be a debt ceiling negotiation, I think that it should be a budget negotiation," said Robert Wolf, a prominent Democratic fundraiser and former Obama-era economic adviser, characterizing it as a "thread the needle" challenge for the White House to draw the distinction.

GOP leaders, meanwhile, were left livid that the White House had once again brushed aside their opening bid — still refusing to meet with McCarthy on the debt limit.

“I think it’s absolutely tone deaf,” said Rep. Garret Graves (R-Ga.), a McCarthy deputy who helped craft the party’s debt limit. “I could not believe he made such an arrogant statement.”

“We’ll continue to reach out to the White House,” Graves said. But, he added with his eye on the opposite chamber: “Obviously, it’s the Senate’s ball at this point.”

A White House official said that Biden has consistently challenged Republicans over their various proposals, including criticizing an early blueprint from the Freedom Caucus at several points, and maintained from the outset that he was open to negotiating the budget but not the debt ceiling.

White House officials have kept in close touch with Senate leaders over their plans to maintain Biden’s no-negotiation posture, believing they can still grind enough Republicans down over time — especially as pressure and political attacks on swing-district lawmakers begin to mount. Despite McCarthy’s victory on Wednesday, Biden allies noted that he still lost four members on what was effectively a messaging bill — and needed Rep. George Santos to vote yes and bail him out of potential embarrassment.

Still, there is recognition that the bill’s passage means Biden's "show us your plan" dismissals will no longer cut it. Aides downplayed the idea that a meeting with Biden represents a direct reward for passing his bill, and stressed that any sitdown would include other congressional leaders.

Biden is also unlikely to meet with Republicans on the issue until May at the earliest, with the House leaving Friday for recess until May 8. (McCarthy allies, though, had said he’s willing to fly back to D.C. for such an occasion.)

For now, though, most Democrats seem comfortable with Biden’s position.

“Most Americans want Republicans to take action to avoid default. They don’t want the price of that to be throwing a million people off Meals on Wheels,” said Sen. Bob Casey (D-Pa.), who endorsed Biden early in the 2020 primary. “After that’s done, on a bill that should be about [the debt ceiling] and nothing else, you can have lots of discussions about appropriations level.”

Those kinds of Democratic attacks — targeting the GOP’s proposed cuts to popular social programs — will likely make up much of Biden’s messaging going forward. Though White House officials remain nervous about how and when the standoff will end, Biden's more politically minded advisers see the House bill as an early gift to a re-election campaign that will rely heavily on contrasting Biden's agenda with the goals of the GOP's conservative wing, two people familiar with the campaign planning said.

Still, battleground Republicans argue that it’s Democrats, not their own party, that will face backlash if they keep sitting idle.

Rep. Mike Garcia (R-Calif.), who won a seat that swung towards Biden in 2020, said he is “looking for a president that actually shows up to the table.” But he also acknowledges that what Republicans passed was the first salvo in what is expected to be a tense standoff — even if other members of the right wing disagree.

“McCarthy has been very clear: This is the first step to change, right? But you got to be in a negotiation,” Garcia said Tuesday. “You have to have another party at the table to negotiate with, so we will not negotiate with ourselves anymore.”