Why this debt ceiling showdown is different

From: POLITICO Playbook - Thursday Jan 26,2023 11:19 am
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POLITICO Playbook

By Eugene Daniels, Rachael Bade and Ryan Lizza

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With help from Eli Okun and Garrett Ross

Rep. Kevin McCarthy (R-Calif.), Sen. Chuck Schumer (D-N.Y.) and President Joe Biden at a meeting in the White House.

Rep. Kevin McCarthy (R-Calif.), Sen. Chuck Schumer (D-N.Y.) and President Joe Biden at a meeting in the White House. | Kevin Dietsch/Getty Images

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DRIVING THE DAY

WHAT THEY’RE READING AT THE DNC — JMart’s latest: “No Democratic Bench? Josh Shapiro and Wes Moore Are Ready To Step Up”

THE COMEBACK CONTINUES — DONALD TRUMP can now return to Facebook and Instagram following a decision by Meta that will end the former president’s two-year suspension from the platforms. More from Rebecca Kern

The view from Meta: “The public should be able to hear what their politicians are saying — the good, the bad and the ugly — so that they can make informed choices at the ballot box,” Meta policy guru NICK CLEGG said. Read Meta’s full blog announcement

CNN’s Oliver Darcy extracts some more details: “A Meta spokesperson told me that Trump will be permitted to attack the results of the 2020 election without facing consequences from the company. However, the spokesperson said, if Trump were to cast doubt on an upcoming election — like, the 2024 presidential race — the social giant will take action.”

WHY THIS DEBT CEILING FIGHT HAS VETS TERRIFIED — With a catastrophic federal default potentially months away, Wall Street and the rest of America is reacting with a big yawn — and, honestly, can you blame them?

The high-stakes debt standoffs of BARACK OBAMA’s presidency each ended with last-second deals that avoided economic calamity and saved face for all the principals involved. Washington went on to lift the debt limit four more times with minimal drama.

So why are so many veterans of the first modern debt ceiling showdown freaking out? Across party lines and perspectives from both ends of Pennsylvania Avenue, those who lived through the 2011 showdown agree on one thing: This time feels different — and they are terrified that it will end with the country in financial ruin, as Eugene and Adam Cancryn report this morning.

On the surface, there are two big parallels between then and now: (1) House Republican leaders have promised their most conservative members that they'd put restraints on a Democratic administration while struggling to keep the right wing of their party in check, while (2) a Democratic president is unsure if the Republican speaker has the clout to get his conference in line.

But look a little closer, as veterans of the 2011 showdown have, and you’ll see stark differences:

1. This time, Republicans are preparing to stare down the White House without any clear consensus about what they want in exchange for hiking the debt ceiling — other than, of course, making it as politically painful for President JOE BIDEN as possible.

BRENDAN BUCK, aide to then-Speaker JOHN BOEHNER: “I wish I could look at this, having been through a bunch of these, and say there’s going to be a bunch of drama but this is how it gets resolved. But I don’t know how this gets resolved. There are just huge obstacles here [that] I don’t think were quite as problematic in 2011.”

2. There’s a razor-thin GOP House majority, andthe administration has little confidence that Speaker KEVIN McCARTHY has the influence to pull his conference back from the brink, even if he wanted to.

DAN PFEIFFER, a senior White House aide during the 2011 showdown, said that though the Obama team thought there was a good chance the country would fall off the cliff, they also felt Boehner understood the gravity and “did intellectually and substantively understand why default was terrible.”

“Boehner may have been willing to put more of his ass on the line,” Pfeiffer said. “He was trying to find a way to avoid defaulting while keeping his job. And I’m not sure that McCarthy understands that, that McCarthy cares, that McCarthy would value the full faith and credit of the United States over his own job.”

A Biden-McCarthy meeting is in the works.

— McCarthy’s POV: CHAD GILMAN, a spokesman for McCarthy, said the speaker looked forward to discussing a “responsible debt ceiling increase” with Biden, and added the White House should be open to negotiating “how we can put America on a sounder fiscal path by finally addressing irresponsible government spending.”

— Biden’s POV: While the White House continues to insist it will not negotiate, officials have previously said he’s open to discussing broader fiscal policies. But there’s growing frustration in Biden world that the onus is on the president and congressional Dems to be the “adults in the room” and bend to the will of a narrow House Republican majority.

But, right now, both men seem dead set on not blinking.

“It feels like there’s a desire to get closer and closer to the brink,” said DAVID VANDIVIER, a senior Treasury official in the Obama administration and veteran of the 2011 crisis. “At a certain point, you don’t know where the line is.”

TOP-ED — “The scariest part of the debt ceiling impasse: Washington isn’t scared,” by Ramesh Ponnuru in WaPo

Good Thursday morning. Thanks for reading Playbook. How would you resolve the debt ceiling showdown? Drop us a line: Rachael Bade, Eugene Daniels, Ryan Lizza.

 

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Harmeet Dhillon speaks.

Harmeet Dhillon, whose law firm served as Trump’s counsel for his dealings with the House Jan. 6 Committee, has been hoping to flip what her team believes are “soft” McDaniel votes. | Alex Wong/Getty Images

NEW QUESTIONS ABOUT TOP DHILLON ALLY — On the day she announced her run for RNC chair last month, HARMEET DHILLON promised her Twitter followers that, if elected, “one of my first job offers” would be to SCOTT PRESLER, a pugnacious, MAGA-inspired grassroots organizer who boasts more than 1 million social-media followers.

Dhillon’s association with Presler has raised some eyebrows in RNC circles. For one, Presler published committee members’ email addresses and Twitter accounts in a bid to harness grassroots sentiment against electing incumbent chair RONNA McDANIEL to a fourth term.

But some had another reason to recoil at Presler’s involvement: He previously worked with and reported to the RNC as a Republican Party of Virginia operative until the party suddenly cut ties in August 2016. According to three people familiar with the circumstances, Presler engaged in sexual activity inside a Virginia Beach office the RNC shared with the state party — and posted explicit pictures of the encounter on Craigslist.

Yes, you read that right. Craigslist.

After party officials were made aware of the photos, Presler was confronted about what had happened and — seeing the writing on the wall — resigned. Federal campaign finance records confirm the state party stopped paying Presler just two months before the 2016 election.

Reached by phone Wednesday, Presler hung up on Playbook, and he did not respond to subsequent messages detailing the allegation. The RNC declined to comment, except to note that Presler never worked directly for the committee, and the Virginia GOP did not respond to messages seeking comment.

The situation underscores concerns that some Republicans — even some McDaniel critics — have about how Dhillon will staff and run the RNC if she prevails, and it’s not just about poor judgment on the part of her potential hires. As conservative commentator ERICK ERICKSON noted in his Substack Wednesday, Presler is part of a group of close Dhillon advisers with roots in the GOP’s extreme right.

Several promoted DONALD TRUMP’s false stolen-election claims, including Presler, Dhillon campaign manager CAROLINE WREN and Arizona GOP chair KELLI WARD, and Erickson noted that Presler’s troublesome background doesn’t end there: He once spoke at an event that also featured NICK FUENTES, the white nationalist and Holocaust revisionist who met with Trump in November.

“My concerns with [Dhillon] are about judgment as we head into 2024,” Erickson wrote in a post endorsing McDaniel, adding that the challenger “has surrounded herself with people still screaming about 2020 and who made money off the January 6 rally, and who wanted to primary Republicans ready to move forward.”

Responding for Dhillon’s campaign, Wren accused McDaniel without evidence of seeking to smear Presler in order to "cling to power," adding that it was “the tactic of a flailing campaign that’s attempting to pander to a small faction of our party by spreading lies about Scott.”

McDaniel campaign spokesperson EMMA VAUGHN denied the claim: "Harmeet's team has lied repeatedly throughout this campaign, so it should be no surprise they are lying again now,” she said. —Bethany Irvine contributed reporting to this item.

 

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BIDEN’S THURSDAY:

9 a.m.: The president will receive the President’s Daily Brief.

1:40 p.m.: Biden will depart the White House en route to Springfield, Va.

2:45 p.m.: Biden will deliver remarks on the economy.

5:30 p.m.: Biden and first lady JILL BIDEN will host a Lunar New Year reception at the White House.

VP KAMALA HARRIS’ THURSDAY: 

3 p.m.: The VP will depart Los Angeles International Airport en route to Joint Base Andrews.

7:25 p.m.: The VP will arrive at Joint Base Andrews.

THE HOUSE will meet at 10 a.m.

THE SENATE will meet at 10 a.m. At 1:45 p.m., the Senate will vote on a resolution to designate January as National Stalking Awareness Month.

 

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PHOTO OF THE DAY

MONTEREY PARK, CALIFORNIA - JANUARY 25: U.S. Vice President Kamala Harris walks past photos of victims before placing flowers at the memorial outside the Star Ballroom Dance Studio where a deadly mass shooting took place on January 25, 2023 in Monterey Park, California. Eleven people died and nine more were injured at the studio near a Lunar New Year celebration last Saturday night. Harris also was scheduled to meet with families of victims in the predominantly Asian American community of Monterey Park.

Vice President Kamala Harris walks past photos of victims before placing flowers at the memorial outside the Star Ballroom Dance Studio where a deadly mass shooting took place on January 25, 2023 in Monterey Park, California. | Mario Tama/Getty Images

PLAYBOOK READS

THE WHITE HOUSE

THE ROAD AHEAD — “Biden’s next 2 years: A brutal war and a rough campaign,” by Jonathan Lemire, Eli Stokols and Alexander Ward: “With Biden potentially weeks from announcing his reelection bid, a war with no end in sight threatens to loom over him on the trail. … Biden aides see the war as a winning 2024 issue for the president, who has framed the conflict as a battle for democracy.”

BIDEN’S BACKUP — “Inside the Democratic ‘SWAT Team’ Combating the GOP’s Biden Probes,” by The Daily Beast’s Sam Brodey: “Determined to prevent a rerun of the Obama years, top Democrats are standing up a pair of outside groups — the Congressional Integrity Project and Facts First USA — and building them for the sole purpose of running aggressive interference for Biden on the barrage of GOP probes from Capitol Hill. Staffed by the Democratic Party’s masters of the dark arts of opposition research and spin, the groups are promising to apply bare-knuckled tactics in dealing with Republicans.”

ALL POLITICS

BLUEPRINT FOR A PURPLE STATE — Our colleague Holly Otterbein has the download on Rep. RUBEN GALLEGO’s (D-Ariz.) plans for his campaign against Sen. KYRSTEN SINEMA (I-Ariz.). His “advisers are beginning to roughly sketch out what his unorthodox path to victory could look like. They believe that Gallego, who is running to be Arizona’s first Latino senator, would generate excitement among Democratic voters in addition to benefiting from the high turnout of a presidential election.”

Here’s what Gallego told Holly: “Let’s be clear about one thing. Sinema is not going to split the Democratic vote. She’s even more unpopular with Democrats than she is with Republicans, and actually has a better chance of taking votes away from their side if they nominate another MAGA candidate — which they likely will.”

JUST POSTED — “Sen. Rick Scott is running for re-election pushing his controversial tax plan,by NBC’s Marc Caputo

CALENDAR CONUNDRUM — “DNC members fire back over New Hampshire's complaints about primary changes,” by Elena Schneider: “In a virtual meeting on Wednesday night, members of the Democratic National Committee’s Rules and Bylaws committee, the panel charged with recommending a new slate of early primary states, criticized New Hampshire for its pushback against the process.”

HOOSIER HULLABALOO — “Senate Republicans get front seat to brewing Indiana Senate clash,” by Burgess Everett and Adam Wren: “MITCH DANIELS is on a Goldilocks mission: Finding out whether the Senate is just right for his deal-cutting style. The former Indiana governor and Purdue University president embarked on a tour of Capitol Hill Wednesday to figure out whether running for his state’s open Senate seat makes sense, talking to senators both happy and frustrated with their jobs. The well-known Republican has insisted politics is not on his mind, as conservatives line up behind potential primary rival Rep. JIM BANKS (R-Ind.).”

CONGRESS

DOCU-DRAMA — The furor over Biden, Trump and former VP MIKE PENCE’s possession of classified documents is boiling over on Capitol Hill, as members of the Senate Intelligence committee demanded “access to classified documents that were discovered,” and accused the administration of “stonewalling them over the matter,” AP’s Mary Clare Jalonick and Nomaan Merchant write.

Eyebrow-raiser from Sen. MARCO RUBIO (R-Fla.): “I’m not in the business of threats right now. But I’m just saying every year this committee has to authorize how money is spent in [Biden’s] agencies.”

And a piece of advice from Sen. MARK WARNER (D-Va.): “Go check your closets.”

Meanwhile, Sen. TOM COTTON (R-Ark.) said he will slow down confirmation of all of Biden’s nominees until Congress is allowed to review the classified documents, vowing to “impose pain” on the administration. “Cotton’s stance threatens to shut down an already slow-moving Senate. The chamber has taken just one roll-call vote since being sworn in on Jan. 3: confirming an assistant defense secretary on Monday,” our colleagues Burgess Everett and Nicholas Wu write.

What was in the Pence docs: “Pence classified documents included briefing memos for foreign trips,” by CNN’s Jamie Gangel, Jeremy Herb, Elizabeth Stuart and Evan Perez

MANCHIN IN THE MIDDLE — “Manchin pushes to delay tax credits for electric vehicles,” by AP’s Matthew Daly

DEPT. OF VOTE-COUNTING — “McCarthy faces narrow path in trying to oust Omar from committee,” by WaPo’s Marianna Sotomayor

HEADS UP — NYT: "A judge in San Francisco ruled on Wednesday that footage of a home intruder’s attack on PAUL PELOSI, the husband of former Speaker NANCY PELOSI, could be released publicly over the objections of prosecutors. ... [I]t could become available as soon as Thursday."

WHERE CONGRESS CAN AGREE — In a 420-1 vote, the House commended Iranian demonstrators for their ongoing protests of the Islamic Republic’s government. The lone no vote? New Rules Committee member THOMAS MASSIE (R-Ky.). More from AP’s Farnoush Amiri

THE TALENTED MR. SANTOS — “How George Santos Made Baruch Volleyball Famous,” by NYT’s Billy Witz and Corey Kilgannon: “It’s one thing to apparently lie about having two college degrees, working at Goldman Sachs and Citigroup, losing four employees in the Pulse nightclub shooting, his grandparents surviving the Holocaust and his mother escaping the South Tower on 9/11. But being a volleyball star at a commuter school in the heart of Manhattan?”

TRUMP CARDS

RARE REBUKE — ELAINE CHAO, who was Transportation secretary under Trump, fired back at her former boss for hurling a string of racist attacks at her in recent months amid his ongoing feud with Chao’s husband, MITCH McCONNELL. “When I was young, some people deliberately misspelled or mispronounced my name. Asian Americans have worked hard to change that experience for the next generation,” Chao said in a statement to POLITICO. “He doesn’t seem to understand that, which says a whole lot more about him than it will ever say about Asian Americans.” Meridith McGraw has more on Chao’s pushback

 

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JAN. 6 AND ITS AFTERMATH

HOW IT’S PLAYING ACROSS THE COUNTRY — “Some Jan. 6th rioters gain sympathy for cause in red states,” by AP’s Amancai Biraben and Stephen Groves: “Of the nearly 400 people who have been sentenced so far for riot-related charges, more than 40 percent have avoided jail time entirely. About 150 rioters have gotten six months behind bars or less, according to an AP tally.”

POLICY CORNER

STAT OF THE DAY — “U.S. authorities have seen a 97% decline in illegal border crossings by migrants from Cuba, Haiti, Nicaragua and Venezuela since Mexico began accepting those expelled under a pandemic-era order, the Biden administration said Wednesday,” writes AP’s Elliot Spagat.

GOOGLE IT — “‘A Hard Sell’: Can Biden’s DOJ really shatter Google’s grip on digital ads?” by Josh Sisco and Brendan Bordelon

WAR IN UKRAINE

HOW IT HAPPENED — “Inside Washington’s about-face on sending tanks to Ukraine,” by Alexander Ward, Lara Seligman, Paul McLeary, Hans von der Burchard, Matthew Karnitschnig and Suzanne Lynch

GIVE TANKS — “Western Tanks Are Coming to Ukraine, but Will They Be Enough?” by NYT’s Lara Jakes and Thomas Gibbons-Neff

LATEST ON THE GROUND — “Russia fires a wave of missiles at Ukraine,” NYT 

THE PANDEMIC

WORTH A SHOT — “New booster works against dominant Covid strain,” by Krista Mahr

MEDIAWATCH 

SIGNED, SEALED, DELIVERED — “News outlets ask judge to unseal documents in Dominion’s defamation case against Fox News,” by CNN’s Oliver Darcy

VALLEY TALK

MUSK READ — “Elon Musk Explores Raising Up to $3 Billion to Help Pay Off Twitter Debt,” by WSJ’s Berber Jin and Alexander Saeedy

THE ANTI-SOCIAL CLUB — “Social media is a defective product, lawsuit contends,” by Ruth Reader

JUST POSTED — “TikTok’s New Defense in Washington: Going on the Offense,” by NYT’s Cecilia Kang, Sapna Maheshwari and David McCabe

 

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PLAYBOOKERS

George Santos gave his first floor speech and later was asked about the latest season of RuPaul’s Drag Race (which he claimed he hasn’t yet watched).

Donald Trump hosted dinners with the conservative online influencers Seth Dillon, who owns The Babylon Bee, and Chaya Raichik, owner of the Libs of TikTok account, per NBC.

The Xbox is the latest entrant in the culture wars, apparently.

Former Rep. Andy Levin (D-Mich.)will receive the Raphael Lemkin Human Rights Award from T’ruah for his work on the Two-State Solution Act.

Washingtonian released its “100 Very Best Restaurants in Washington” list. How many have you tried?

SANTOS MAKES SOME NEW FRIENDS — SPOTTED at Hill Country Barbecue’s karaoke night yesterday evening: George Santos sitting with a mix of Hill staff, reporters, lobbyists and at least one former member, ex-Rep. Kevin Yoder, per two tipsters. A birdie tells us the group of D.C. acquaintances randomly decided to invite the Beltway’s biggest walking scandal — and that they were shocked when he agreed to show up. The group tried to get Santos to sing, and he briefly considered taking the stage to “I Will Survive.” But, alas, we’re told he got cold feet. Maybe next time … PicVideo

SPOTTED in the lobby of the Waldorf Astoria in Dana Point, Calif., for the RNC meeting: Musician John Rich, in a black cowboy hat, red, white and blue boots and a leather coat, trying to whip votes for Harmeet Dhillon, but also looking uncomfortable around reporters. Kari Lake was also on hand, stumping for Dhillon in a gaggle of reporters before going off on a tangent and repeating unsubstantiated claims that she only lost the election because of fraud, and lecturing the press about “lying” to the nation about it. (Dhillon had to steer the conversation back to her own race.)

SPOTTED: Matt and Mercedes Schlapp saying hello to Rep. Marjorie Taylor Greene (R-Ga.) on Tuesday night at Joe’s, where she was holding court.

OUT AND ABOUT — SPOTTED on Tuesday night at a 2024 election kick-off reception hosted by Energize Our Future at Holland and Knight: Reps. Wesley Hunt (R-Texas) and John Moolenaar (R-Mich.), Ellie Dick, Denise Bode, James Kyrkanides, Kevin Bruce, Anton Castaneda, Chris Coulon, Emma Ernst, Kate Farr, Robert Flock, Ashley Strobel, Katie Hammons, Paul Hartman, Jason Hill, David Holt, John Lowry, Liz Murrill, Kevin Norton, Tim Tarpley, Meghan Thacker, Jaime Zarraby, Aaron Johnson, Miller Lewis and Susan Lilly. 

The Progressive Change Institute and P Street held “A Night With Progressives: New Year, New Congress” event on Wednesday night, which began with “Speed Intros” in speed dating format with new members of Congress and reporters before breaking out into a larger reception. SPOTTED: Sen. Tina Smith (D-Minn.), Reps. Maxwell Frost (D-Fla.), Greg Casar (D-Texas), Delia Ramirez (D-Ill.), Robert Garcia (D-Calif.), Jill Tokuda (D-Hawaii), Sydney Kamlager-Dove (D-Ill.), Becca Balint (D-Vt.), Hillary Scholten (D-Mich.), Morgan McGarvey (D-Ky.), Shri Thanedar (D-Mich.), Chris Deluzio (D-Pa.) and Jasmine Crockett (D-Texas), Reema Dodin, Andy Green, Daniella Diaz, Sara Cook, Ursula Perano, Thea Sebastian, Jarod Facundo, Michelle Shen, Raquel Krahenbuhl, Shaniqua McClendon and Julia Manchester.

MEDIA MOVE — Margaret Sullivan is joining The Guardian to write a weekly column on media, politics, culture and the “urgent moral and political debates of the moment.” She previously was a columnist at WaPo. The announcement

FIRST IN PLAYBOOK — Hannah Muldavin will be senior comms adviser for the Congressional Integrity Project. She previously was deputy comms director for the Jan. 6 select committee and is a David Trone and DNC alum.

TRANSITIONS — Ben Williamson is joining Rep. Michael Cloud’s (R-Texas) office as chief of staff, our colleague Olivia Beavers reports. He most recently was executive director of Freedom First PAC and is a Trump White House and Mark Meadows alum. … Sam Spencer is now political director to Speaker Kevin McCarthy. He previously was a regional political director at the NRCC. … Ray Zaccaro is joining the AFL-CIO as strategic adviser and head of public affairs. He previously was an adviser for Sen. Jeff Merkley (D-Ore.). …

… Joanna Burgos is launching a new firm, Compel. She previously was with OnMessage Inc. for a decade, and will continue to share some clients with OnMessage in her new endeavor. … Kathee Facchiano is now a VP at Van Scoyoc Associates. She previously was chief of staff for Rep. Clay Higgins (R-La.). … Evan Barker is launching Lifecycle Media, a political media business focused on TV and ads. He previously was director of statewide campaigns at Left Rising.

ENGAGED — Lars Kahl, VP for strategy and operations at POLITICO, and Emily Livingston, an anesthesia resident at Columbia/Presbyterian Hospital in NYC, got engaged on a run in Central Park on Jan. 16. The couple met in New York. Pic

HAPPY BIRTHDAY: House Speaker Kevin McCarthy … HHS Secretary Xavier Becerra … Rep. Albio Sires (D-N.J.) … HHS’ David Naimon … POLITICO’s Olivia Beavers and Brian Cormier… The Atlantic’s Tim Alberta Jim Papa of Global Strategy Group … Axios’ Justin GreenKayla Gowdy of The Washington Times … Mala Parker of the International Foodservice Distributors Association … NPR’s Isabel LaraMatt Miller of Rep. Ben Cline’s (R-Va.) office … Cheri JacobusLayla Brooks of Rep. Nikema Williams’ (D-Ga.) office … Brett LaysonJen HingLindsay HayesMargie OmeroChristian Deschauer … former Minnesota Gov. Mark Dayton Sheila Angelo Rob Foreman …Belfer Center’s Max Castroparedes Mason Zeagler of the Michael J. Fox Foundation … Michelle Shevin-Coetzee of Rep. Ruben Gallego’s (D-Ariz.) office

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