McCarthy tries to get out of his box on debt ceiling
House Speaker Kevin McCarthy (R-Calif.) is pressing for Democrats to come to the bargaining table and begin negotiations to address the nation’s debt limit, as he faces pressures within his party to make good on significant fiscal reform.
McCarthy called on the White House to start discussions this week. But as both sides gear up for the fight over the country’s borrowing limit, the GOP leader is getting the cold shoulder from Democrats, who have characterized ideas floated on the other side as nonstarters.
“Republicans are creating a crisis that need not exist,” Rep. Brendan Boyle (Pa.), top Democrat on the House Budget Committee, said on Thursday, while decrying what he called “political games.”
The impasse has heightened public concern in recent days, particularly as the Treasury Department has begun what it calls “extraordinary measures” to keep the U.S. government from defaulting on its debt.
The standoff comes as House Republicans have ramped up calls to tie spending cuts to any bill raising or suspending the debt limit — legislation that caps how much outstanding national debt the government can hold to fulfill its financial duties. Democrats, by contrast, have instead insisted on a clean bill to address the debt ceiling.
“It is essential 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 confront the debt limit “without conditions.”
Democrats could certainly shift from demanding a clean bill, as lawmakers and the country face a time crunch to handle the matter in the months ahead. But it’s an approach that even GOP strategists say could be effective for the party, particularly as McCarthy works to find a plan his conference can get behind.
“The Democrats are trying to find out if Republicans can come up with a unified position, and their general assumption is they won’t be able to,” said Republican strategist John Feehery, who is also a columnist for The Hill.
“That’ll make it easier for them to kind of continue with their posture of, ‘We’re not going to negotiate,’ which is not particularly defensible,” Feehery said. “But Republicans can’t come up with a unified position, it seems like it’s a pretty smart strategy from their perspective.”
The nation’s debt climbed to more than $31.4 trillion this week, federal financial data shows, crossing the threshold set by Congress when it last raised the nation’s borrowing limit more than a year ago.
It’s unclear how long the Treasury Department will be able to utilize the measures to prevent what would be an unprecedented default, but Treasury Secretary Janet Yellen told leaders on Thursday that a “debt issuance suspension period” would last through June 5.
That timeline puts a squeeze on Congress to strike a deal to stave off a default. Strategists say McCarthy and Republicans also face more pressure to begin to come up with clearer goals for the party to work toward in debt limit talks.
GOP divisions were on display earlier this month when it took a historic 15 rounds of votes in the lower chamber for Republicans to elect McCarthy as Speaker — but only after he agreed to a list of concessions from detractors in his party to win their support.
“Republicans are off to a clumsy start obviously and suggesting to the American people that they can competently run government,” GOP strategist Rob Stutzman said on Thursday.
But that critical test earlier this month, Stutzman said, is evidence of the GOP leader’s negotiation skills.
“You can quibble with what he gave away in terms of like seats on oversight, but he negotiated all that, and he’s holding this thing together with baling wire and bubble gum,” Stutzman said. “And I don’t know that anyone else could have effectively done that.”
But the longer it takes Republicans to unite behind a plan to address the borrowing limit, t and other strategists warn the party runs the risk of bad optics, absent firm proposals that can win the GOP conference’s support.
“Republicans need to have a very consistent clear message of what they’re trying to accomplish,” GOP strategist Dave Carney said on Thursday. “Stopping the budget ceiling, raising the debt limit for no other than political reasons, is terrible, and they won’t sustain the heat.”
Many have drawn similarities between the current stalemate and the debt limit standoff in 2011, when a GOP-led House wrestled with a Democrat-led Senate and the Obama administration to secure concessions on spending.
The messy months-long impasse eventually ended in Republicans securing a deal to raise the debt limit that was also aimed at drawing down spending significantly in the following 10 years. However, the dragged-out fight, which experts say pushed the nation to the edge of default, also led to S&P downgrading the nation’s credit rating in a historic first.
Despite the similarities, then-Speaker John Boehner (R-Ohio) had a noticeable advantage over McCarthy, with more than 240 Republicans in the lower chamber’s ranks at the time — roughly 20 more than in the current Congress, where McCarthy can only afford to lose a handful of votes in his conference to pass more party-line bills.
That doesn’t mean Boehner also didn’t struggle to unify his party on a solution to tacking the debt limit, strategists note, as he faced obstacles to satisfy the demands of conservatives calling for more fiscal reform.
Just as before, Republicans are also finding themselves navigating familiar terrain in proposals to tackle the nation’s climbing debt, with similar political landmines like potential changes to entitlement programs — which eat up a chunk of the annual budget — and cutting discretionary spending.
Some Republicans have raised the prospect of leveraging the debt limit to secure potential changes to programs like Social Security and Medicare in recent months. Both programs are staring down insolvency in the coming years — and were ranked in reporting from the Treasury as number one and five on its list of the top 10 categories and agencies for federal spending in the previous fiscal year, respectively.
“What we have been very clear about is, we’re not going to touch the benefits that are going to people relying on the benefits under Social Security and Medicare,” Rep. Chip Roy (Texas), among the roughly 20 Republicans who had opposed McCarthy’s bid, said during a CNN appearance earlier this month.
As part of the concessions McCarthy struck with Roy and other GOP detractors to secure the Speaker’s gavel, lawmakers say the leader also agreed to cap discretionary spending at fiscal 2022 levels.
However, there are concerns in the conference over where defense funding, which accounts for a bulk of the annual discretionary spending that Congress hashes out in the yearly appropriations process, will fit in talks.
In response to reports of potential cuts on the defense side, Republican defense hawks reiterated strong support for Pentagon funding. At the same time, McCarthy pushed back on estimates that the defense side could see cuts as high as $75 billion in recent days.
However, McCarthy has also signaled some support for certain cuts in tax dollars for defense, as he looks for ways to draw down spending to appeal to the different factions in his conference.
“Does defense getting more than $800 billion, are there areas that I think they could be more efficient in? Yeah. Eliminate all the money spent on ‘wokeism.’ Eliminate all the money that they’re trying to find different fuels and they’re worried about the environment to go through,” McCarthy said.
While that thinking is likely to meet a cool reception in the Democratic-led Senate, it comes as the Republican leader tries to balance the potentially conflicting demands in his conference as he navigates a narrow GOP House majority.
“There’s evidence he knows how to negotiate,” Stutzman said of McCarthy. But, he added, “his problem’s been he’s had to negotiate with too many people just by circumstance.”