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Biden-McCarthy: The untested relationship at the center of debt ceiling talks

<i>Jacquelyn Martin/Pool/Getty Images</i><br/>President Joe Biden shakes hands as he presents a copy of his speech to House Speaker Kevin McCarthy before he delivers his State of the Union address to a joint session of Congress
Jacquelyn Martin/Pool/Getty Images
President Joe Biden shakes hands as he presents a copy of his speech to House Speaker Kevin McCarthy before he delivers his State of the Union address to a joint session of Congress

By Lauren Fox and Jeremy Diamond, CNN

(CNN) — For the first time in months, President Joe Biden and House Speaker Kevin McCarthy appear to be on the same page: The country cannot default on its debt and a compromise has to be reached to avert that outcome.

“We are going to come together because there is no alternative,” Biden said in remarks Wednesday morning from the White House, one day after his latest sit-down with McCarthy.

The two men remain far apart on how to actually reach that deal, but sources familiar with the negotiations pointed to the common recognition of the need for compromise and the more cordial tone of the meeting as a glimmer of progress.

That very notion – that basic agreement and a less confrontational meeting signaled progress this week – underscored a key liability hanging over the two weeks remaining to avert economic catastrophe: the largely untested nature of Biden and McCarthy’s relationship and some of the public sniping that has befallen the early stages of these talks.

“Well, it would help if McCarthy and Biden were golf buddies, but they aren’t and they were never going to be,” Mississippi Republican Sen. Roger Wicker put it bluntly to CNN.

In the days ahead of their first meeting, Biden and McCarthy shared a short and courteous call that one source told CNN left the speaker hopeful there could be room for a deal. But days later, in their first in-person meeting since February, sources close to both men described interactions between Biden and McCarthy as sharp. McCarthy directed his questions at Biden only for Senate Majority Chuck Schumer to jump in, leading McCarthy to point out he wanted to hear from the president. At one point, McCarthy pointedly told Biden his claim that Republicans were taking away veterans funding was simply a lie.

Biden described some of McCarthy’s comments in the meeting afterward as “a little over the top.”

Unlike Senate Republican Leader Mitch McConnell, with whom Biden has shared decades of Senate negotiations, Biden and McCarthy are generationally unmatched, ideologically opposed and personally not close.

“They really are starting out at an extremely nascent point in these negotiations,” Ben Howard, former floor director for McCarthy, told CNN of the two men’s relationship.

The announcement Tuesday evening that Biden and McCarthy would dispatch a smaller circle of widely trusted advisers to hash out the details of increasing the country’s borrowing limit was seen as a welcome shift to talks that were stuck in neutral. Biden appointed longtime aide and counselor to the President Steve Ricchetti and Office of Management and Budget Director Shalanda Young, a former staff director of the House Appropriations Committee, to lead the charge alongside Legislative Affairs Director Louisa Terrell. Young has a long and productive relationship with House Republicans, having served as the staff director for the House Appropriations Committee. McCarthy appointed his close ally and trusted policy adviser Rep. Garret Graves, a Republican from Louisiana, to lead talks for him.

“We’re not there … but I see the path,” McCarthy said Thursday. “Where we were a week ago and where we are today is a much better place because we’ve got the right people in the room discussing it in a very professional manner with all the knowledge and all the background from all the different leaders and what they want.”

In an acknowledgment that a deal will ultimately come down to Biden and McCarthy shaking hands, Biden canceled the second half of his foreign trip, noting he will need to be on hand to finalize and “sign the deal with” McCarthy.

But the obstacles for two men with little shared personal history remain – a surprising place for two leaders who each prioritize fostering personal relationships as the key to achieving their political ends.

Biden frequently reminds his staff of his view that politics is personal and leans on that approach in his pursuit of deals with members of Congress and foreign leaders alike.

McCarthy has spent years personally recruiting members to run for office, slowly endearing himself to political foes in his right flank from Rep. Marjorie Taylor Greene of Georgia to Rep. Jim Jordan of Ohio and convincing his conference over 15 rounds of voting to make him speaker. Still, when it comes to the president, the relationship has been harder to build. Before these talks, McCarthy and Biden have rarely met one on one, not to mention negotiated on issues of such high importance.

When he was vice president, Biden and McCarthy occasionally lunched at the Naval Observatory, meetings that aides say were cordial but not foundational in building up a strong reserve of goodwill or trust needed for the kind of high-wire act that the two men are engaged in now.

“They gotta learn to work with each other,” Republican Rep. Frank Lucas of Oklahoma said. “Everybody involved has to grow into the role to match the responsibilities. They don’t have any other choice, so they’ll step up.”

A senior administration official acknowledged that Biden and McCarthy’s relationship is largely untested, but characterized it as being in a “growing phase” – albeit one defined by the critical positions both men now hold more than any particularly strong personal chemistry.

The White House has made some efforts at relationship-building, including inviting McCarthy and his mother to the French state dinner in December and spending some time with McCarthy and House Republicans in September after the signing of a bill commemorating the late Republican Rep. Jackie Walorski of Indiana. And a senior administration official told CNN Biden sought frequent updates on McCarthy’s work in the House and his policy priorities. The official said those briefings were Biden’s way of getting a more well-rounded view of McCarthy’s policy priorities, which Biden views as a key building block to building a relationship and forging agreement.

“They are both gregarious ‘let’s make a deal’ politicians. I’d feel better had they gotten to know one another over the first two years of the Biden administration. That’s the president’s choice,” Rep. Tom Cole, a Republican from Oklahoma, told CNN. “We are behind where we should be because the president called a meeting and then waited 97 days to call the next one.”

Ninety-seven days, a challenge and a GOP debt ceiling bill

Making the negotiations even more tenuous, GOP aides say, is the fact that the White House did not engage on the debt ceiling for more than three months even as McCarthy and top aides made repeated entreaties to Biden and his staff to get together to talk, even after Biden himself at the National Prayer Breakfast and Friends of Ireland lunch told McCarthy he’d be open to meeting. Instead, Biden and his team insisted on McCarthy laying out his own budget blueprint.

“Show us your plan,” became the Democratic refrain.

The White House dismisses Republicans’ criticism of the three-month gap as flimsy, pointing out that Biden unveiled his budget proposal a month after meeting with McCarthy and was waiting for McCarthy to come to the table with his own plan.

“The president has always been very clear to the speaker in a respectful way, ‘I’m ready to have a conversation with you when you have a plan,’” White House legislative affairs director Louisa Terrell said in an interview ahead of Biden’s latest meeting with McCarthy. “And as I understand it on those instances, the plan was not there yet – there was nothing on the table. And as soon as one passed, there was an invitation to talk about the budget.”

McCarthy didn’t just lay out his plan – he passed it through a narrowly divided GOP conference. But sources close to the speaker tell CNN that McCarthy viewed the repeated pushes to unveil his own plan as a challenge and in part a sign that Democrats were underestimating his abilities, questioning whether he could hold his narrow majority together. When he did it, the speaker – and his conference – felt even more emboldened to get more out of the White House in their negotiations.

“If there was good intentions, I think you could settle this in two days,” said Graves. “I think the president – by telling the speaker of the House on February 1 that they were going to continue meeting yet refused to meet again, refused to come back for three months, refused to respond to inquiries about getting back together again – I think that there is a trust and integrity issue.

McCarthy hasn’t forgotten the snub and brings it up almost every time he is asked publicly about the debt ceiling.

“I don’t think it is a personal thing,” one person close to McCarthy put it. “It’s a little bit more of a whiplash. Biden seems more agreeable, and then you get in a room with Schumer or with aides, and it’s back to square one.”

McCarthy, for his part, has also rubbed Democrats the wrong way in his handling of debt ceiling negotiations.

While Biden described McCarthy’s behavior as “a little over the top” during last week’s meeting, other sources familiar with the meeting described McCarthy as obnoxious and “a little much.” One source familiar with the meeting said McCarthy spoke as though he were posturing for his caucus rather than in a room with the President and his fellow congressional leaders.

Sources close to the White House also point out that McCarthy has taken personal shots at the president, making insinuations about his age, including when he once quipped that he would bring “soft food” to the White House if that’s what it would take to get a meeting. By contrast, administration officials said Biden has remained respectful of McCarthy, both in public and behind closed doors.

Administration officials say the president ignores those comments and hasn’t let it impact his relationship with McCarthy nor the White House’s strategic and tactical outlook on the debt ceiling.

Can a deal be reached?

Members on the sidelines have worried that the largely untested nature of the Biden-McCarthy relationship could be problematic to reaching a deal, but there is growing optimism that the negotiators now do have that relationship with the speaker.

Young spent years on Capitol Hill entrenched in messy appropriations showdowns with Republicans and emerged with a keen understanding of GOP dynamics and what McCarthy needs, members say.

Another hopeful sign, colleagues point out, is that both Biden and McCarthy are cognizant of the calamity that could befall the country if there was a default.

“The interest of the country can also be motivating, and I hope they would be sufficiently motivating to all the parties involved to get a deal done,” Republican Sen. Mitt Romney of Utah told CNN.

Administration officials also emphasize that Biden understands that McCarthy is walking a political tightrope – wrangling a slim majority and an increasingly extreme group of conservatives.

Asked last week if he trusts McCarthy, Biden said “I trust Kevin will try and do what he says.”

“I don’t know how much leeway Kevin McCarthy thinks he has,” Biden added, before noting that McCarthy made “some serious concessions” to the right wing of his party in order to become speaker.

That lack of political leeway factors heavily into the White House’s thinking about how Biden and McCarthy will ultimately forge an agreement.

The White House views it as unlikely that McCarthy will be able to pass whatever deal emerges with Republican votes alone. A senior administration official said the White House is focused on how to reach a deal that enough of McCarthy’s caucus can support without losing the number of House Democrats who will also be needed to get a bill across the finish line.

But asked whether McCarthy is more interested in passing a deal to avert default or holding onto his speakership, a senior administration official demurred before noting that the White House is focused on threading the needle to ensure both outcomes.

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