Speaker of the House Kevin McCarthy, R-Calif., talks with reporters in regards to the debt ceiling negotiations within the U.S. Capitol on Tuesday, May 23, 2023.
Tom Williams | CQ-Roll Call, Inc. | Getty Images
WASHINGTON — Debt ceiling negotiations between the White House and congressional Republicans took on a latest, harder tone this week after House Speaker Kevin McCarthy signaled that he was not willing to compromise with Democrats over a listing of GOP demands.
As an alternative, McCarthy’s deputies say they view a vote to lift the debt ceiling — and to avoid a potentially catastrophic U.S. debt default — as a concession to Democrats, and potentially the just one they plan to make. Given the havoc a default could wreak on the worldwide economy, increasing the borrowing limit is often a formality, often structured as a companion bill that gets tacked on to unrelated laws.
Rep. Patrick McHenry of North Carolina, a chief GOP negotiator, was asked Tuesday night what concessions Democrats were getting as a part of a possible compromise with the White House to win each Republican and Democratic votes.
“The debt ceiling,” he replied.
“That is what they’re getting,” added Rep. Garret Graves of Louisiana, one other GOP negotiator.
Republicans hold a narrow majority within the House, while Democrats have a one-seat edge within the Senate. So negotiators have to craft a bill that may pass in each chambers. Republican demands for policy changes that many Democrats would never vote for will complicate any eventual deal’s path through Congress.
A Democratic official said Republicans have already rejected at the least two compromise offers from the White House. The primary proposed a government spending freeze next yr at its current level, and one other offer would put in place a two-year cap on spending.
While their demands could change, below are the important thing concessions Republicans want from Democrats, in exchange for his or her vote to lift debt ceiling. Some are relatively easy, while others are proving intractable.
- Energy and mining permitting reform: The proposal is arguably the best issue for negotiators to succeed in consensus on, provided that each the White House and House Republicans support the broader goal of creating it easier to launch latest energy projects like wind farms and gas pipelines in the US. The talks could get dicey over the query of what sorts of permits to prioritize: Republicans want fossil fuels, while many Democrats consider renewable energy should top the list.
- Rescind unused COVID-19 funds: Between 2020 and 2022, Congress authorized roughly $4.6 trillion to help the US reply to the coronavirus pandemic. The Congressional Budget Office estimates that about $30 billion of that cash has not been earmarked and could possibly be clawed back to be able to create savings. President Joe Biden has indicated that the White House will conform to this demand.
The subsequent few are much trickier.
- Recent work requirements for Medicaid: The Republican debt limit bill passed by the House in April would require able bodied adults with no children to work or train for work to be able to stay on Medicaid, the federal medical insurance for low-income people. The White House rejected this proposal. “I’m not going to simply accept any work requirements that is going to affect on medical health needs of individuals,” Biden said earlier this month.
- Changes to current work requirements for food stamps: Unlike the Medicaid demands, it appears there could possibly be some room for compromise on GOP proposals to lift the work retirement age window for people enrolled within the Supplemental Nutrition Assistance Program (SNAP), from 50 to 55 years old. The identical day Biden rejected the Medicaid work requirements, he also noted that he supported work requirements within the Nineties, and “it’s possible there could possibly be just a few others” he would support, “but nothing of any consequence.”
- A federal budget baseline number in 2024 that’s lower than it was in 2023: That is the largest sticking point in the entire process, and the difficulty over which the talks have broken down temporarily just a few times.
McCarthy often equates the U.S. national debt of $31.4 trillion to individual consumer debt. He argues that in case you go “over your limit” on personal bank cards, then you definitely, and by extension America, have to “spend less in the approaching yr than we spent this yr.”
However it’s not that easy. Raising the debt limit doesn’t authorize more spending in the longer term. For now, it merely allows the federal government to cover the bills it has already incurred.
What Republicans are really doing is using their leverage, and the implicit threat of default, to perform a separate, longstanding GOP policy goal: Force the federal government to roll back discretionary spending. On this case, McCarthy wants 2024 baseline spending to be rolled back to its 2022 level. Yet he also insists that defense spending — which makes up greater than 30% of the whole — be insulated from any cuts. This implies all the things else would should be slashed even further to get the general number back to 2022 levels.
Based on the conservative-leaning CATO Institute, exempting the military from a spending rollback would require cutting the remainder of presidency — all the things from homeland security to public health to air traffic control — by around 20%.
Biden has countered this demand for steep cuts to domestic programs with a proposal to freeze this yr’s spending levels next yr, but McCarthy has to date rejected that.
“I do not think I’m asking the inconceivable,” McCarthy said Wednesday. “Let’s spend less money in the approaching yr than we spent this yr.”
Along with the general public demands above, House Republicans even have a second set of asks, a conservative wish list of sorts that McCarthy and his team have to date not dropped at the table in a serious way.
Nonetheless, these back shelf demands were on full display Wednesday in a memo released by conservative Texas Rep. Chip Roy, a McCarthy antagonist who led the failed effort earlier this yr to disclaim McCarthy the House speakership.
Roy’s list of demands accommodates 4 additional items. Each of them by itself represents a red line for the White House.
- Repeal the electrical vehicle tax credits at the middle of Biden’s renewable energy agenda, which were passed last yr within the Inflation Reduction Act (IRA).
- Repeal $80 billion in additional funding for the Internal Revenue Service, also a part of the IRA.
- Overturn Biden’s executive motion to forgive roughly $315 billion price of student loan debt. (The Supreme Court will resolve the plan’s fate in the approaching weeks).
- Enact the REINS Act, which might require regulatory agencies just like the Federal Trade Commission and the Environmental Protection Agency to get congressional approval before they may issue major rules.
Roy’s memo called on McCarthy and Republicans to “hold the road” and demand that each one of their demands be met or nothing in any respect. It also suggested that, at the least for Roy, avoiding a debt default was not the #1 priority.
“Each [of the demands] are critical and none must be abandoned solely for the search of a ‘deal,'” wrote Roy.