Where Will They Go? Sensitivity to the Debt Limit and the Great Debt Condensate in the 21st Century
Where will they go? There’s lots of evidence that Republicans will, if they can, try to use the debt limit to extort major cuts in Social Security and Medicare. They probably couldn’t pass such cuts — which would be deeply unpopular — through the normal legislative process, and they certainly wouldn’t have enough votes to override a Biden veto. The public does not know that Democrats are responsible for the pain.
It is a best-case scenario. The G.O.P. is much more radical than it was a decade ago, and it may not be that interested in achieving policy goals than in blowing up the world economy on a Democratic president’s watch.
It’s a recipe that – some fear – could take the nation to the brink of a potentially cataclysmic default, especially since some positions against raising the limit at all seem intractable.
So what should be done to avert this threat? If Republicans win control of either the House or the Senate in November, Democrats should use the last moments of the Congress to raise the debt limit by a factor of three or four, which would put the issue off for years. Republicans and pundits who don’t understand the stakes would furiously attack this move, but it would be far better than enabling extortion — and would probably be forgotten by the time of the 2024 election.
The Times of Wall Street: Democrat Discontent at the Affordable Housing and Affordable Care Deals in the Era of Presidential Recuperation
The Obama administration wanted to seek compromise and so they were unwilling to go any of these routes. But surely Democrats don’t need to worry about dignity when the other party is ruled by Donald Trump. They are now facing opponents who are both radical and anti-democracy; no real compromise is possible.
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The Treasury Department is projected to hit its borrowing limit next year, though it is unclear exactly when the agency will run out of so-called extraordinary measures to ensure payments continue for a few months.
Goldman Sachs economists warned this week that raising the debt limit would be difficult, but that the United States could get to a point where it wouldn’t have had to fight over it in 2011. The analysts also noted that less than a quarter of Republicans and less than a third of Democrats who will serve in the House in 2023 were there in 2011.
Richard M. Burr of North Carolina, who is one of several Republicans retiring at the end of the year, said in an interview that he would hope they would do it now. “We all know that on Feb. 1, the 2024 presidential races start, so you’re automatically already in the political season before you do anything next year, and I would hate for one side or the other to take the debt ceiling and to use it for the purposes purely being political.”
“The way we’ve done debt ceiling in the past is bipartisan,” Senator Chuck Schumer of New York, the majority leader, said at a news conference last month. It would be great to see it done before the end of the year.
The government funding standoff gripping Washington ahead of Friday’s shutdown deadline is one of the first indicators of the coming shift in power dynamics that will return the capital to a governing cold war between congressional Republicans and a Democratic White House.
One of the last acts of unified Democratic political control of Washington was an omnibus spending bill that would prevent the federal government from closing. Republican conservatives are trying to keep key decisions under wraps until the new Congress in January when they hope to use their new majority to cut spending.
It’s an early glimpse of the paralysis that could result from divided government with neither side having the power to fully deliver on promises they made to voters in last month’s midterm elections, when Republicans won the House and Democrats retained control of the Senate.
The government may shut down or be badly damaged in the US economy if some of the clashing disagreements are not resolved soon. This heralds a return of the government shutdown threats that were a regular holiday season tradition during the Obama administration after Republicans gained congressional majorities. And during Donald Trump’s administration, the government shut down for 35 days over the 2018-19 holiday season because of a dispute over the then-president’s demand for border wall funding – leaving federal workers furloughed and putting critical programs and services on hold.
The Republican senators wrote to McConnell last week, urging him to block the big spending bill and agree to a short term funding package to keep the government open for a few weeks.
A long-term funding mechanism could actually give House GOP leaders a break since a short-term deal would raise the possibility that one of the first acts of a new majority would be to shut down the government. Kevin McCarthy is in danger of becoming speaker because of the pressure he is receiving from the most radical members of his conference. He has little political leeway and has therefore been heaping public pressure on Senate Republicans to thwart Biden’s hopes of one more spending package, saying on Fox News earlier this month that once Republicans have the gavel in the House, “We would be stronger in every negotiation.”
While giving a glimpse of how he plans to handle a confrontation with the White House, his comments also seemed to show how the GOP House could make McConnell’s life more complicated as he tries to manage his party in the Senate.
But a senior Biden administration official warned last week that even a funding deal that lasted a year would have “disastrous” consequences for key programs.
Running with the flow: Dem Dems, Sens. Bernie Sanders and the Grisham-McCounnell compromise on cuts to Medicare and Social Security
And on Sunday, Sen. Bernie Sanders, the Vermont independent who caucuses with Democrats, implied that Republicans were trying to jam Democrats at the end of this year to kickstart their effort in the new GOP House to slash spending on vital social programs.
“Republicans see it as an opportunity to hold us hostage and get demands that, under normal circumstances, they would not,” Sanders said on CNN’s “State of the Union.”
“Now, as they vote for even more tax welfare for the rich, Republicans across the House Conference are demanding cuts to Medicare and Social Security as ransom for not triggering an economic crisis,” Bates said.
Biden sent Secretary of State Antony Blinken and Secretary of Defense Lloyd Austin up to Capitol Hill last week to brief senators on the war in Ukraine. But in a sign of the consuming nature of the spending showdown, Republicans emerged from the meeting complaining that the two secretaries spent time lobbying for an omnibus spending bill over a continuing resolution.
“It was a waste of their time. Louisiana Republican Senator John Kennedy has said that it was a waste of time. He said Chuck Schumer had asked for an explanation as to why the new spending bill was necessary. “I knew as soon as Chuck said that. … this is just a political exercise,” Kennedy said.
South Dakota’s No. 2 Senate Republican John Grisham told reporters last week that they might be singing to each other.
“Hell no,” McCarthy told House Republicans about his position on the spending package – just a few hours before McConnell declared on Tuesday that the deal in the works was “broadly appealing.” According to congressional negotiators, an agreement has been reached for the framework that will allow them to complete a full-year government funding package.
Roy and 12 other Republicans sent a letter to GOP senators on Monday saying that if the government funding bill passes, they would oppose and whip against “any legislative priority of those senators who vote for this bill.” McCarthy said “Agreed” after they responded to their letter. Except no need to whip – when I’m Speaker, their bills will be dead on arrival in the House if this nearly $2T monstrosity is allowed to move forward over our objections and the will of the American people.”
“It’s a House-Senate dynamic, and the conference in the House, obviously, a lot of times can be in a different place than the conference in the Senate,” said Senate Minority Whip John Thune, the South Dakota Republican who serves as McConnell’s top deputy.
The House Republicans, like McCarthy, don’t want to deal with the threat of a government shutdown immediately after they have a majority. With a divided government and a narrow House majority, funding the government is likely to be a challenge.
Tension between the House and Senate is as old as the republic itself, given that the fast-moving House can approve legislation by a simple majority and the slow-moving Senate can be ground to a halt by a single senator and needs 60 votes to overcome a filibuster. In the new Congress, McConnell will lead a 49-seat Senate minority while McCarthy will have 222 Republican seats in the House. McCarthy will only have enough GOP votes to pass legislation if he is speaker on January 3.
The Alabama Republican, who is the top GOP appropriator, said of McCarthy that he probably had a reason to oppose it. “They may oppose it on philosophical grounds, maybe opposes it on political grounds.”
On Tuesday, McCarthy dodged a question about McConnell support for the emerging funding package and instead pointed his finger at Democrats.
McCarthy said his message was to Democrats who want to spend more. “I wouldn’t be adding more money after all that they compounded on and all that they spent, especially just last year.”
“We’re on defense,” the Kentucky Republican told reporters. “We’re dealing with the cards we were dealt.” He said that they were able to ramp up funding for defense programs and hold the line against Democrats’ push to raise money for other domestic programs.
In the absence of a concrete plan, which Republicans have broadly said will focus on spending cuts, White House officials have pressed for the political upper hand in calling into question McCarthy’s commitment to leave Medicare and Social Security untouched given the position of some members in the conference.
McCarthy’s critics are complaining about the process being played out, even though McCarthy is against the spending package.
“You’ve got Mitch McConnell preparing to roll the House right now on additional trillions of dollars in spending,” said Rep. Scott Perry, a Pennsylvania Republican and the chairman of the far-right House Freedom Caucus. “Tell me how something changes here. I’m interested to hear, but right now, I don’t see anything changing.”
House GOP leadership is formally whipping against the one-week short-term spending patch to extend this Friday’s deadline until December 23, and Republican sources believe leaders will likely whip against the omnibus bill as well. McConnell is likely to vote for one or both packages.
A bipartisan omnibus appropriations package for the U.S. Department of State, Rep. Patrick Leahy, Chairman and Ranking Republican Senator Richard Shelby
“They have different styles, different flavors of their conferences,” the member said. The dynamic is not the same. McCarthy is fighting for his political life.”
The House approved a stopgap bill to prevent a government shut down this week, with funding set to expire at midnight on Friday. The vote was 224 to 201 with nine Republicans joining with Democrats to vote in favor.
The Senate has to approve the bill before it can go to President Joe Biden for his signature. As soon as Thursday, the Senate could vote.
A framework for a full-year funding package was reached Tuesday evening in a sign of progress, but it is not certain if it will suffice for Congress to complete its work.
Senate Appropriations Committee Chairman Patrick Leahy said in a statement that he and ranking Republican member Richard Shelby and House Appropriations Committee Chairwoman Rosa DeLauro “reached a bipartisan, bicameral framework that should allow us to finish an omnibus appropriations bill that can pass the House and Senate and be signed into law by the President.”
The top line is around $1.7 trillion, but no explanation was given. Shelby said the exact allocations to the different government agencies are still being negotiated.
There is disagreement between the two parties over how much money should be spent on non-defense priorities, which made it difficult for a bipartisan agreement for a full year government funding deal.
Conservatives are against recent domestic spending by Democrats which they say is wasteful and will make inflation worse because they have been in control of both chambers of Congress.
Democrats say that those measures are necessary in order to help the country recover from the impact of the Psyphilly epidemic as well as other important priorities. Democrats say that money to respond to Covid, health care and climate should not mean there should be less money next year for government operations and non-defense, domestic spending.
“Right now, the emotions are high,” he said. We are running against a holiday to deal with funding the government and there are differing opinions on how to do that. I get that. But in the end, I think it’ll get done and I think it will set the stage for next year and it seems to be at least in the House next year, that would be an advantage for them. They will start with a clean slate.”
The Republican Senator said that McCarthy was speaking from the position that any bill sponsored by a Republican senator who supports the omnibus bill will be dead on arrival in the House.
The silly season of a campaign is going on. That is over after you get elected. He said that the silliness is still evident, because he is running for speaker of the House.
Having won the coveted job, the California Republican has leveled up to a new series of challenges with higher stakes for all Americans, and less room for error for a man who needed 15 tries to get the gavel.
The Rules Package: Where are we going? How will we go from the Senate to the House? What will the House and Senate decide on next?
Unlike the Senate, which has standing rules that carry over from year to year, the House adopts a new rules package for each Congress. The Republicans will want to make their mark in the rules this year as they take over from Democrats. The Rules Committee has posted a text and summary of the proposed rule changes.
Other elements could have more concrete consequences, like forcing specific votes to raise the debt ceiling and enacting spending cuts before the debt ceiling is raised. That debate will come to a head in the coming months as the government runs out of authority to add to the $31 trillion national debt.
GOP defense hawks vow to protect defense spending limits the pool of money on the discretionary side of the budget where they can cut from
Raising taxes is a way of cutting down on deficit spending. There is a requirement that the majority of the House sign off on any tax increases.
If McCarthy fails to live up to these promises, the rules also allow for any member to force a vote on a “motion to vacate the chair” – ousting him from the speaker’s chair – at any time. It would take a group of Republicans, along with all Democrats, to oust him.
“How am I going to look at our allies in the eye and say, ‘I need you to increase your defense budget, but yet America is going to decrease ours,’” Gonzales said on CBS’ “Face the Nation” on Sunday.
Nancy Mace of South Carolina said that she likes a lot of the rules package, but she is on the fence because it was formulated behind closed doors with fringe Republicans.
It’s an irony both that the rules package is perceived as being hashed out behind closed doors and that those who held out on supporting McCarthy argued they were achieving a path to a more open government.
We don’t yet know all of the concessions McCarthy made to bring the ultra conservatives along. Roy denied during an appearance on CNN that he had been promised a position on the powerful Rules Committee. He said that would ultimately be up to the rest of the Republican conference.
The House of Representatives cannot pass such amendments due to the leaders being from both parties. They relied on discussion in the appropriations and authorization committees.
“Too often bills are cooked up with handful of people, they’re brought through with the Rules Committee, jammed through, put on the floor and you have to vote yes or no,” Roy told CNN’s Jake Tapper on Sunday. There is a conflict in this town.
He wants more of the openness and free form debate – the kind that Americans saw on the House floor during the speaker fight – to be present in spending discussions.
The idea that these debates are necessary was even being adopted by critics of the drawn-out speaker fight, like Republican Rep. Dan Crenshaw of Texas.
When he needs to negotiate with Senate Democrats and Biden, things will get harder for McCarthy, as he has to appease the fringe that doesn’t want to go to the brink.
Roy wanted party leaders to find a path to raise the debt ceiling quickly rather than waiting until there is a must-do moment.
If Democrats were willing to raise the retirement age, I wouldn’t object to raising the cap. As for Medicare reform, my guess is it will never happen. I bet that in 20 years we will have a horrible but free single-payer system for part of the population and an excellent but expensive universe of private providers. As for actual budget cuts, maybe we could end stupid subsidies like the one for ethanol production. It’s too popular with farm-state Republicans.
People are saying that is Bret: Well, the Republicans’ current strategy has all the intelligence of Foghorn Leghorn, the Looney Tunes rooster: They’re trying to play a game of chicken with the Biden administration when, deep down, they know they’re the ones who are going to chicken out. It would be economically destructive and politically suicidal to let the federal government default on its debt. Until a few swing-district Republicans break ranks and vote with the Democrats to raise the debt ceiling, this will be terrifying.
Bret: Other than trying to find ways to slow the rate of spending growth, I can’t imagine there would be cuts to either program. They’re popular with Republican voters, too, after all. Nothing is going to happen except on a bipartisan basis. Suggestions for small tax increases that don’t involve large tax increases?
The Far Right Way: Proposal for Tax Fairness in the House of Representatives to the Joint Causal Committee on Social Security, Medicare and Defense
Gail: Well, some people may regard this as a tax increase, but I want to propose some tax fairness. For some reason, Social Security payroll taxation stops at about $160,000. So a person making a million dollars a year doesn’t pay anything on about $840,000.
Gail: Bret, I spent a lot of my early career — way back in the ’70s — hanging out with the chief of police in New Haven, Ed Morrone, who was just so smart. He told my husband that keeping the people who hate each other apart was the most important job of a cop.
When CNN asked if he would vote for a debt ceiling increase, if it included his priorities, Rep. Greg Pence, an Indiana Republican, said no. That is what I heard back at home.
While McCarthy has not made up his mind on any proposal and is unlikely to make a specific offer at the Wednesday meeting, he and other House Republicans are roundly rejecting the White House’s position to raise the borrowing limit without strings attached.
“You are always going to have a handful that will vote ‘no’ on everything. Nancy Mace is a South Carolina Republican. It is important to negotiate. We have to act that way because we’re a divided Congress.
McCarthy said he wanted to take those off the table, but also talked about a House GOP policy agenda that was laid out before the elections.
Social Security is the second largest component of the federal government’s $5.8 trillion spending in the last fiscal year, accounting for about 21% of it. The rest of the budget goes to domestic programs, including defense and national security.
The conservative crew met Friday morning and Monday to discuss ideas for spending cuts that could achieve a balanced budget within ten years, and will unveil a plan in the coming weeks, a member involved in the talks said.
As discussions intensify, the group wants to meet with GOP leaders like McCarthy and Arrington, as well as the House Budget Chairman.
The lawmaker from South Carolina told CNN that there will be a model for what the House will be fighting for. Social Security, not Medicare, is not being touched. We are putting it out for the American people. And it will shock people. I think people will like what they see.
A Moot Point: Reply to McCarthy’s Call for a Higher Deddell Payments Plan with a Remaining Debt Ceiling
“It’s sort of a moot point,” Massie told reporters. “What could you do here that the Senate would pass and the president would sign? Why would you even start the discussion and let people distort what you’re trying to do when there’s no possible positive outcome?”
While McCarthy is trying to build conference-wide consensus on what they will propose in exchange for raising the nation’s borrowing limit, some appropriators acknowledged they may wind up on the sidelines of the debate.
“I will be either the beneficiary, or victim, of however that comes out, because we will be getting a (topline spending number) for my subcommittee,” Rep. Chuck Fleischmann of Tennessee, who sits on the House Appropriations Committee, told CNN. I will be directly affected.
“I think most everyone is in the camp of ‘can’t default.’ The member of the House Budget Committee said the full faith and credit of the country is important. “But just to say we’re going to raise the debt ceiling without any spending restraint is just not an acceptable outcome.”
The speaker of congress has to put a bill on the floor by the end of March that will direct the Treasury Department to prioritize payments in the event of a debt ceiling crisis.
Massie said one idea that he had been advocating for is a continuing resolution which funds the government at 99% of current levels, and pairs it with a debt ceiling increase, so they have a backup plan in the event they don’t come to an agreement.
Others are looking at contingency plans as well. The problem Solvers Caucus in the House is working on a proposal that would try to set a ratio for the amount of debt the US can afford compared to the country’s Gross Domestic Product, and then try to come up with a plan for budget cuts if that level is broken. The budget experts are helping the group draft the proposal.
Rep. Brian Fitzpatrick, a Pennsylvania Republican involved in that effort, said that their plan would be a fallback in case talks between the White House and McCarthy collapse.
McCarthy and Biden are set to meet on Wednesday in a face-to-face that has already been subject to positioning and political messaging, moves that both sides hope will influence the battle to raise the debt limit. White House officials have been steadfast that there will be no negotiations on the matter while House Republicans have framed Wednesday’s meeting as the beginning of debt ceiling talks.
The White House coordinated with congressional Democrats in order to get Republicans to present their own proposal, even though they have maintained a united front in opposition to any actual negotiations.
House Minority Leaders: Bringing Back the Debt Ceiling Up to the White House and What Happens Behind the Close-Up of the Budget Crisis
McCarthy said during his interview on CBS that he wanted to find a responsible way of lifting the debt ceiling, but taking control of this runaway spending.
White House officials have closely monitored House Republican preferences and have wasted no time in responding to them.
More broadly, there remain significant questions about whether House Republicans can find the necessary 218 votes for anything given the strident opposition held by some in the conference about raising the debt ceiling at all.
The White House’s political salience to the programs is highlighted by the focus on Medicare and Social Security despite McCarthy’s decision to take changes off the table.
White House officials point to the framing of “strengthening” the programs as a euphemism for structural changes they oppose. Absent a clear House Republican proposal, that has become a central line of attack in a debate that is still in its early stages – with potentially dramatic consequences ahead.