Five Facts on the 2011 Debt Ceiling Deal
This week, President Biden and Speaker McCarthy convened for the first time in over three months to negotiate on the debt ceiling. Although the face-to-face meeting garnered headlines, it didn’t bring the two sides closer to an agreement. Time is quickly running out to strike a deal to prevent a catastrophic default.
This ordeal has parallels to the high-stakes debt ceiling negotiations of 12 years ago. Back then, following similarly contentious negotiations, Congress and the White House reached an agreement in the eleventh hour, narrowly avoiding a default.
Here are Five Facts about the 2011 debt ceiling deal.
1. The deal was reached 70 days after the start of negotiations between Congress and the White House, and only 5 days before the government was set to default on its debt.
After bipartisan discussions to lift the debt ceiling in the Senate fizzled out, negotiations between the Republican-held House and the Obama White House began on May 5, 2011. However, these talks collapsed on June 23 over disagreements on tax increases in a debt ceiling deal. Strained negotiations resumed between President Obama and House Speaker John Boehner on July 3, but again collapsed on July 22nd, jeopardizing a deal. In the end, a deal wasn’t announced until July 31, mere days from the projected default date of August 5.
2. Then-Vice President Biden was intimately involved in the negotiation process.
During the first round of negotiations in May, then-Vice President Joe Biden and a few Democratic lawmakers began meeting with the Republican House Majority Leader Eric Cantor and Republican Senate Minority Whip Jon Kyl. Biden continued to participate in talks after the initial discussions collapsed, and was dispatched to Capitol Hill to rally support for the eventual deal. In recent months, Biden has cited his experience from that negotiation process as one reason why he is insistent on a clean debt ceiling increase this time around.
3. The August 2nd deal lifted the debt ceiling in exchange for at least $2.4 trillion worth of spending cuts over the next 10 years.
The Budget Control Act of 2011 raised the debt ceiling by $400 billion immediately to avoid the imminent default. The bill also laid the groundwork for an additional raising of the debt ceiling first by $900 billion, then by up to $1.5 trillion. It also called for implementing $917 billion in spending cuts over 10 years, and established a bipartisan, bicameral "supercommittee" that would have to recommend at least $1.5 trillion more in spending cuts. If Congress failed to enact sufficient deficit reductions, across-the-board cuts to discretionary spending, or "sequestrations," would be triggered.
4. The final bill passed 269-161 in the House and 74-26 in the Senate.
During the negotiation period, both the Democratic Senate and the Republican House advanced bills that passed along partisan lines, but the final deal – the Budget Control Act of 2011, ultimately received significant bipartisan support, as well as opposition from members from both parties’ more extreme wings.
5. The supercommittee that was tasked with recommending spending reforms failed to complete its work.
The Joint Select Committee on Deficit Reduction – or supercommittee – was comprised of six senators and six representatives drawn equally from both parties. After the bill became law in early August, the supercommittee had until November 23, 2011, to come up with its recommendations. The main points of contention were disagreements over tax increases (supported by Democrats) and entitlement program cuts (supported by Republicans). Because Congress failed to rein in spending, sequestrations did end up going into effect starting in 2013. These automatic spending cuts expired in 2022.