McCarthy tries to get out of his box on the debt ceiling
Speaker of the House Kevin McCarthy (R-Calif.) is pushing for Democrats to sit down at the negotiating table and begin negotiations on a national debt limit as he is under pressure within his party to push for significant fiscal reforms.
McCarthy urged the White House to start discussions this week. But as both sides prepare to fight over the country’s borrowing limit, the GOP leader is facing a cold reception from Democrats who have described the ideas put forward by the opposing side as unpromising.
“Republicans are creating a crisis that shouldn’t happen,” Rep. Brendan Boyle (PA), the top Democrat on the House Budget Committee, said Thursday, denouncing what he called “political games.”
The deadlock has added to public anxiety in recent days, especially as the Treasury Department has launched what it calls “extraordinary measures” to keep the US government from defaulting on its debt.
The standoff comes as Republicans in the House of Representatives stepped up calls to tie spending cuts to any bill that raises or suspends the debt limit — legislation that limits the amount of outstanding public debt the government can hold to meet its financial obligations. Democrats, by contrast, are instead pushing for a clean debt ceiling bill.
“It’s important for Congress to recognize that dealing with the debt ceiling is their constitutional responsibility,” White House press secretary Karine Jean-Pierre said this week, calling for action to move the debt ceiling “without strings attached.”
Democrats can certainly drop the clean bill requirement as lawmakers and the country face time pressure to resolve the issue in the coming months. But it’s an approach that even GOP strategists say can be effective for the party, especially as McCarthy works to find a plan that his conference can support.
“Democrats are trying to figure out if Republicans can come out with a unified stance, and their general assumption is that they can’t,” said Republican strategist John Figeri, who is also a columnist for The Hill.
“It will make it easier for them to maintain their ‘We’re not going to negotiate’ position, which is not particularly justified,” Fiheri said. “But the Republicans can’t come up with a unified stance, which seems to be a pretty smart strategy from their point of view.”
National debt topped $31.4 trillion this week, according to federal financial data, surpassing the threshold set by Congress when it last raised the country’s borrowing limit more than a year ago.
It’s unclear how long the Treasury Department can use measures to stave off an unprecedented default, but Treasury Secretary Janet Yellen told leaders on Thursday that the “debt suspension period” would extend until June 5.
This schedule forces Congress to make a deal to prevent a default. Strategists say McCarthy and the Republicans are also facing more pressure to start setting clearer targets for the party in debt-limit talks.
The division of the Republican Party was on display earlier this month when it took Republicans a historic 15 rounds of voting in the lower house to elect McCarthy as speaker – but only after he agreed to a list of concessions from detractors in his party to garner their support.
“Republicans have clearly started off clumsily and are indoctrinating the American people that they can competently run government,” GOP strategist Rob Stutzman said Thursday.
But that critical test earlier this month, Stutzman said, testifies to the GOP leader’s negotiating skills.
“You can nitpick what he gave away in terms of oversight places, but he negotiated all of this and he holds it together with bale wire and chewing gum,” Stutzman said. “And I don’t know how anyone else can do it effectively.”
But the longer it takes for Republicans to unite around a plan to break the borrowing limit, other strategists are warning that the party risks a bad optics due to a lack of solid proposals that can garner support from the GOP conference.
“Republicans need to have a very consistent clear message about what they’re trying to achieve,” GOP strategist Dave Carney said Thursday. “Stopping the budget ceiling, raising the debt limit purely for political reasons, that’s terrible and they can’t handle the heat.”
Many see similarities between the current stalemate and the debt-limit standoff in 2011, when the GOP-led House of Representatives fought the Democratic-led Senate and the Obama administration to secure concessions on spending.
Filthy months-long dead endit eventually ended in Republicans securing a deal to increase the debt limit, which was also aimed at making significant spending cuts over the next 10 years. However, the protracted struggle, which, according to experts, brought the country to the brink of default, also led to the fact that S&P downgraded the country’s credit rating for the first time in history.
Despite the similarities, then-Speaker John Boehner (R-Ohio) had a distinct advantage over McCarthy, with over 240 Republicans at the time in the lower house, about 20 more than in the current Congress, where McCarthy can only afford to lose a few votes in his conference in order to pass more partisan bills.
That doesn’t mean Boehner hasn’t also tried to unite his party on the issue of debt restraint, strategists say, as he has run into hurdles trying to meet the demands of conservatives calling for further fiscal reforms.
As before, Republicans also find themselves on familiar ground in proposals to deal with the nation’s growing debt, with similar political landmines such as possible changes to welfare programs that eat into the annual budget and cuts to discretionary spending.
In recent months, some Republicans have raised the possibility of using the debt limit to secure possible changes to programs such as Social Security and Medicare. Both programs will face insolvency in the coming years and were rated in a report by the Ministry of Finance as number one and five on his list of the top 10 federal spending categories and agencies in the previous fiscal year, respectively.
But other Republicans are wary of linking the debt-limit fight to reforms in any of the popular programs.
“We’ve been very clear that we’re not going to touch benefits that people who rely on Social Security and Medicare benefits receive,” Rep. Chip Roy (TX) said among about 20 Republicans who opposed McCarthy’s proposal, said in a statement. the time of CNN’s appearance earlier this month.
Lawmakers say that as part of the concessions McCarthy made with Roy and other GOP detractors to secure the speaker’s gavel, the leader also agreed to cap discretionary spending at FY22 levels.
However, there are concerns at the conference about how defense funding, which accounts for the bulk of annual discretionary spending that Congress determines through the annual appropriations process, will fit into the negotiations.
In response to reports of potential defense cuts, Republican defense hawks reiterated their strong support for Pentagon funding. At the same time, McCarthy backtracked on estimates that the defense could cut spending by up to $75 billion in recent days.
However, McCarthy has also voiced some support for some cuts in defense tax revenue as he looks for ways to cut spending to appeal to various factions at his conference.
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“Does defense get over $800 billion, are there areas where I think they could be more effective? Yeah. Get rid of all the money spent on “awakening”. Get rid of all the money they’re trying to find for various fuels and they’re worried about the environment,” McCarthy said.
While this mindset is likely to be met with a tepid reception in the Democratic-led Senate, it comes as the Republican leader struggles to balance potentially conflicting demands in his conference as he manages a narrow GOP majority in the House of Representatives.
“There is evidence that he knows how to negotiate,” Stutzman said of McCarthy. But, he added, “his problem was that, by coincidence, he had to negotiate with too many people.”
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