Like many lawmakers on Capitol Hill, members of Arkansas' congressional delegation are waiting for a deal regarding the debt ceiling.
The Natural State's two senators and four congressmen are following discussions between President Joe Biden and congressional leaders regarding a possible increase. Both sides will have to find a solution to appease both chambers of a divided Congress. House Republicans have put forward a plan coupling an increase with limits on federal spending and recouping certain funds, while Democrats want a clean increase.
The Treasury Department has warned lawmakers it may be unable to fulfill the government's obligations by as early as June 1 unless Congress acts on the debt ceiling in the coming weeks.
Biden and top legislators met Tuesday at the White House with little progress shared following the meeting. Both sides postponed a scheduled meeting Friday with respective staff instead of continuing discussions.
"I don't take no meeting today as a negative thing," U.S. Rep. French Hill, R-Little Rock, told the Arkansas Democrat-Gazette on Friday. "They want to bring the principals back together when they have a more concrete view on both sides."
Congress created the debt limit in 1917 as a way to avoid having to approve issued debt. The federal government can continue financing its obligations as long as the country does not reach the debt ceiling. The United States reached its statutory limit in January, triggering the Treasury Department to take "extraordinary measures" to prevent the country from defaulting.
The matter of raising the debt ceiling is a reoccurring issue on Capitol Hill. According to the Congressional Research Service, Congress has approved 48 measures over the past 40 years to either increase or suspend the debt limit. The most recent debt ceiling increase was approved in December 2021.
Raja Kali, chair of the economics department at the University of Arkansas' Walton College of Business, said the United States is in a unique position compared to its international counterparts regarding the debt limit.
"Most other countries don't have an artificial ceiling like this," he said. "That's why we are -- it seems like every year -- sort of in such [a] situation."
Biden and House Speaker Kevin McCarthy, R-Calif., met in early February to discuss how to avoid a default. The meeting occurred weeks after McCarthy gained the speakership and Republicans took control of the House.
Biden and McCarthy didn't meet again until Tuesday. The time between meetings allowed House Republicans enough time to put together a debt ceiling proposal, the Limit, Save, Grow Act.
The GOP plan, which the House passed last month, would lift the debt limit by March 31, 2024, or $1.5 trillion, whichever comes first. Federal spending levels for the next fiscal year would be set at fiscal year 2022 levels with consideration of a 1% annual growth rate over the next decade.
"We're going to have to raise the debt ceiling, but don't you think we ought to pair that with reasonable spending reductions? That's what we did in the House," Rep. Rick Crawford, R-Jonesboro, said.
"We're not talking about taking it back to 1985 level spending. Being realistic here, how hard is it to go back six months in time?"
Republicans inserted language to reclaim unused coronavirus relief funds; block the Biden administration's student loan forgiveness plan; impose work requirements for assistance programs; and repeal clean energy tax credits and subsidies.
The Limit, Save, Grow Act additionally includes House Republicans' energy package streamlining the permitting process and boosting domestic energy production. The Senate, controlled by Democrats, will not vote on the energy measure itself, with majority leader Charles Schumer, D-N.Y., calling it "dead on arrival."
Rep. Bruce Westerman, R-Hot Springs, helped lead the effort earlier this year to pass the plan. The congressman previously told the Arkansas Democrat-Gazette that his colleagues suggested including the package in the debt ceiling legislation.
"Anybody can say anything they want to about the issue, but the House has acted," he said Friday regarding the debt ceiling. "The House has passed a bill to raise the debt ceiling. At the end of the day, that's what our job is, and that's all we can do."
The White House has lambasted the House's debt ceiling plan, saying the proposal would reduce federal programs and jeopardize services nationwide. Rep. Steve Womack, R-Rogers, a senior appropriator and former House Budget Committee chairman, said any plan to raise the debt ceiling has to consider spending behaviors, citing a national debt approaching $32 trillion.
"It just isn't wise, in my judgment, to just raise the credit limit without agreeing you have kind of a spending problem," he said.
"I think the country is beginning to wake up to the fact that we just can't continue down this road and we [have] got to do something, and House Republicans have offered something. Do I believe that it's going to be the final outcome? No, I don't, and when I voted for it I was not at all thinking that this is going to be the final outcome. I just felt like it would get us to the negotiating table, and I've been a little surprised that that negotiation has taken a while to take place."
Westerman is resistant to any plan that just increases the debt ceiling.
"We can't just simply do a clean debt ceiling bill," he said. "We do have a responsibility to pay our bills, but we also have a responsibility to change our habits and quit spending so much money."
As the White House and Democrats remain wary of ideas affecting spending, Senate Republicans have joined their House counterparts in opposing solely raising the debt ceiling. Sens. Tom Cotton, R-Little Rock, and John Boozman, R-Rogers, joined 41 colleagues on a letter to Schumer against any debt ceiling plan without "substantive spending and budget reforms."
In remarks to the Arkansas State Chamber of Commerce/Associated Industries of Arkansas last Thursday, Cotton described the start of negotiations between Biden and congressional leaders as "healthy."
There are questions related to how a debt ceiling plan could affect the next farm bill, the sweeping legislation covering agriculture, nutrition and rural development programs. The current law expires in September.
Boozman will play a leading role in putting together the new agriculture measure, serving as the top Republican on the Senate Agriculture, Nutrition and Forestry Committee.
"They have to agree on the amount of money that we're going to spend as a whole, and then we'll argue who gets what," he told the Democrat-Gazette last week. "When we get through the debt ceiling, at that point, then we'll know the amount of spending we'll have available."
Boozman expressed confidence the debt ceiling negotiations will not affect funding for agriculture and farming programs. Boozman and congressional agriculture leaders met with Biden on Thursday to discuss the upcoming farm bill.
If a default occurs, Kali warned it could throw the United States into a "realm of the unknown" as the country has never experienced a default. He mentioned a recession, depreciation of the U.S. dollar, and an eroded standing in the global economy as possible consequences of inaction.
"There's really no reason to shoot ourselves in the foot," he added. "It just makes common sense to come up with a different system where we're not doing this every year."
Hill said the debt ceiling is not necessary "as an economic policy matter," but it is helpful to legislators as a political tool. He referenced the 2019 debt ceiling arrangement when lawmakers agreed to raise the debt ceiling and boost spending on defense and domestic programs.
"It gives members of Congress in both parties an opportunity to have another important conversation about spending priorities and spending constraints and structure," he said. "It has important political deadline constraints in and around Congress that produce a conversation that can be helpful."
Crawford acknowledges House Republicans are unlikely to get everything from their proposal in a possible compromise, but he said that's part of the legislative process.
"If we can arrive at a solution where each party gets some of what they want, I think that's all the American people are asking for," he said. "We can come to that common ground if the president is willing to sit down with our side of the table and lay out a game plan."
Treasury Secretary Janet Yellen, in a May 1 letter to congressional leaders, urged Congress to act on the debt ceiling, saying acting with haste is "imperative."
Womack compared the situation to a car running out of fuel.
"If this were a gas gauge, we're kind of into that red area now," he said. "The light's on and the dashboard is dinging at you, so you need to find relief. That's why the four corners of leadership need to get this put behind us."