'I'm much more scared now': Veterans of 2011 debt ceiling crisis say this year's fight is different

 On one hand, it seems like déjà vu for Washington as the country catapults towards a potentially catastrophic default.

Republicans in Congress clashed with Democratic President Barack Obama in 2011, ultimately reaching a deal 72 hours before the country went over a financial cliff.

But one of the key differences between then and now, former aides on the front lines of the 2011 crisis told USA TODAY, is that both sides 12 years ago at least held real negotiations.

The two major players in the debt limit fight, President Joe Biden and Kevin McCarthy R-Calif., appear miles apart.

They sat down Wednesday with the three other top congressional leaders, House Minority Leader Hakeem Jeffries, D-N.Y., Senate Majority Leader Chuck Schumer, D-N.Y., and Senate Minority Leader Mitch McConnell, R-Ky., but both sides were unmoved in their positions after their meeting.

The congressional leaders had planned to meet with Biden at the White House again Friday, but that meeting was canceled. Their top aides will meet instead.

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Senate Minority Leader Mitch McConnell of Ky., Speaker of the House Kevin McCarthy of Calif., and Senate Majority Leader Sen. Chuck Schumer of N.Y., listen as President Joe Biden speaks before a meeting to discuss the debt limit in the Oval Office of the White House, Tuesday, May 9, 2023, in Washington.

‘I’m much more scared now’: Former GOP aide in 2011 debt ceiling crisis

The country could run out of cash to keep paying its debts as early as June 1 according to Treasury Secretary Janet Yellen. The biggest difference between then and now is the pace at how negotiations are proceeding, said Neil Bradley, chief policy officer at the U.S. Chamber of Commerce. 

“I’m much more scared now,” Bradley, who was a former aide to McCarthy and deputy chief of staff for former House Majority Leader Rep. Eric Cantor, R-Va., during the 2011 negotiations, told USA TODAY. “Negotiations in 2011 went right up to the 11th hour in 2011 (but) it was very clear that both sides understood that default is not an option.” 

Today, it is difficult to see if that sentiment still rings true. For both their parts, McCarthy and Biden have said default is not an option, but it still remains uncertain when and how the two parties will eventually come to an agreement.

Everyone was at the table” back then, Bradley said.

House Majority Leader Eric Cantor of Va., left, arrives for a House Republican strategy session on Capitol Hill in Washington, Tuesday, July 29, 2014.

'They want a default more than they want a deal'

McCarthy on Thursday went as far as to say he has not seen any “seriousness” out of the White House and suggested “they want a default more than they want a deal.”

House Republicans have been demanding spending concessions from the White House and congressional Democrats in exchange for raising the debt ceiling, but Democrats have been steadfast in their position the debt ceiling should be increased with no strings attached and instead saying budget talks should be separate from any debt limit discussions.

The situation is a familiar one for the country, which was in the same exact situation in 2011 and the closest it ever came to defaulting on its debts. Back then, the Obama administration and GOP-controlled House came to a deal just two days before the Treasury Department's projected “X-Date,”  the day the U.S. would run out of cash. The threat of a default was so close the U.S. saw its credit downgrade for the first time in history.

The Obama administration never tied spending cuts to future debt limit talks after the country was so close to disaster.

'Positive movement'

On the bright side, Brian Riedl, economist at the Manhattan Institute and former economic aide to then Sen. Rob Portman, R-Ohio in 2011, said while McCarthy and Biden might publicly appear to be miles apart, negotiations behind the scenes by their staffers could bring the fight to a conclusion. Those talks have already begun, Punchbowl News reported Wednesday.

“The good news is, despite claims otherwise, there actually is positive movement towards a resolution,” Riedl told USA TODAY. “Both sides have begun back channel negotiations behind the scenes and that’s ultimately where the deal is going to happen.”

“Biden and McCarthy were never going to trade specific policy offers (publicly) and come to a deal,” Riedl added. 

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US Speaker of the House Kevin McCarthy, R-Calif., takes questions from reporters after a meeting about the United States's debt ceiling in the Oval Office of the White House May 9, 2023 in Washington, DC.

What's similar between 2023 and 2011?

David Kamin, a former economic advisor to both the Obama administration during the 2011 crisis and the Biden administration, told USA TODAY a key similarity between then and now is House Republicans insisting on tying the debt ceiling to budget negotiations.

“Unfortunately … the Republican party is incredibly focused on the debt limit,” Kamin said, which means there will ultimately have to be negotiations. Those discussions will likely be more dialed back and not on the scale of the debt limit proposal House Republicans passed, which included $4.5 trillion in spending cuts, Kamin, now a professor of law at New York University said. 

Democrats and Republicans are soon going to have to negotiate on the budget anyways come fall when Congress has to pass government funding to avert a shutdown, Kamin pointed out.

“That kind of negotiation was going to happen anyway and I think the administration has made clear, they understood they were going to have to reach an agreement with the House Republicans," Kamin said.

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WASHINGTON, DC - MAY 09: U.S. President Joe Biden delivers remarks on the debt ceiling at the White House on May 09, 2023 in Washington, DC. President Biden spoke following a meeting with Congressional lawmakers as they continue to negotiate raising the debt ceiling to avoid a government default. (Photo by Anna Moneymaker/Getty Images)

Biden and McCarthy debt limit deal likely to require bipartisan support

If there is going to be any resolution to the current debt ceiling fight, it is almost certainly going to require bipartisan support. Any bill brought to the House floor will likely be voted on by a hodgepodge of both Democrats and Republicans. When the Obama administration came to an agreement with Republicans on the brink of default, the final product saw a scrappy vote on the House floor. 174 Republicans and 95 Democrats voted for the bill while 66 Republicans and 95 Democrats voted against it.

Any deal that earns the blessing of both McCarthy and Biden has an extremely unlikely chance of winning over 218 House Republicans, Riedl said.

In this July 7, 2011 file photo, President Barack Obama meets with Congressional leadership in the Cabinet Room of the White House in Washington.

Once a deal is reached, Kamin predicts both sides will spin the agreement and argue they won out. McCarthy and Republicans will claim victory for successfully prying spending concessions from the White House while the Biden administration will maintain any budget cuts were unrelated to a debt ceiling hike.

Even if the country broaches the unthinkable and defaults, Jon Lieber, managing director for the United States at the Eurasia Group, a political risk firm, told USA TODAY there will have to be a deal one way or another.

“The resolution is mandatory, the suffering is optional,” Lieber, who was a former aide to Senate Minority Leader Mitch McConnell, R-Ky., during the 2011 talks, said. “I don’t know how much suffering we have to go through to get to the resolution.”

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"For the president to ask for a clean debt ceiling when we have a debt the size of our economy is irresponsible," Senate Republican leader Mitch McConnell said.

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