Can Republicans even agree with each other on a plan to raise the debt ceiling? Washington is about to find out.
After months of buildup, House GOP leaders are expected to release a proposal today to lift the government’s borrowing limit that they hope can win support from 218 members of their own fractious party. Speaker Kevin McCarthy previewed the plan during a speech at the New York Stock Exchange on Monday, saying it would increase the debt ceiling in return for budget cuts and changes to safety net programs as well as energy regulations. He promised a vote “in the coming weeks.”
McCarthy spent much of his address castigating President Biden for refusing to negotiate over the debt limit and asking for support from Wall Street, which is showing increasing signs of anxiety about a potential government default. “Join us in demanding a reasonable negotiation and responsible debt ceiling agreement that brings spending under control,” the California Republican said.
Afterwards, however, McCarthy offered mixed signals whether his proposal had enough backing to pass the House on a party-line vote. Asked on CNBC whether he’d amassed enough Republican support, McCarthy seemed to punt: “I think I have the support of America because I'll get the party behind it,” he said. But he later told CNN he had the necessary votes.
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Whether McCarthy can actually nail down the numbers is anybody’s guess, but there are good reasons to be skeptical given the GOP’s wafer-thin, 5-seat majority. Some Republicans have vowed not to back a debt ceiling increase under any circumstance, and any plan that passes will need to somehow win over hardline conservatives like Florida Rep. Matt Gaetz without scaring away moderates such as New York Rep. Marc Molinaro who won in Biden districts. GOP leadership reportedly has major doubts that their current proposal can thread that needle.
The bill McCarthy outlined on Monday would dial back non-defense discretionary spending to 2022 levels, then hold it to 1% growth for a decade. It would also claw back unspent COVID emergency funds, enact the GOP’s energy bill known as H.R. 1, and impose work requirements on some safety net programs.
While the ideas are broadly popular with Republicans, conservative policy hands told Semafor they wouldn’t be surprised if McCarthy still faced defections.
“It's really easy to say we should cut discretionary spending to 2022 levels. That basic concept might get 218 votes,” Brian Riedl, a budget expert at the right-leaning Manhattan Institute, told Semafor. “But if you have to specify which programs are cut and how much, that's where you start bleeding supporters.”
McCarthy’s proposal is already seen as dead on arrival in the Democratic controlled Senate. However, the stakes riding on it are still high.
If Republicans can’t agree among themselves on a debt ceiling plan, it may leave the speaker with no choice but to try and enlist Democrats’ support for a bill — a move that would threaten to bring down his speakership.
If they can pass something, Republicans think it could clear the way for talks with the White House. President Biden has demanded that Republicans pass a so-called “clean” debt ceiling hike with no conditions; but he’s said he would talk to McCarthy more broadly about spending if the GOP can pass a budget.
The proposal being unveiled today is not, in fact, a full budget, but GOP leaders reportedly believe it might be enough to kickstart negotiations. Rep. Don Bacon, R-Neb., said Republicans aim to vote on the plan by the end of next week before the House breaks for a weeklong recess.
For the time being, Democrats are lambasting the idea of a one-year debt limit extension paired with spending cuts. Senate Majority Leader Chuck Schumer called it “a terrible idea.”
“If Speaker McCarthy continues in this direction, we are headed to default,” Schumer said at a Monday press conference.
All the while, the prospect of more Republican infighting is looming. Recent reports revealed that the bipartisan Problem Solvers Caucus has begun workshopping a fallback plan to raise the debt limit if McCarthy and Biden can’t come to terms. That’s prompted an angry reaction from conservatives in the House Freedom Caucus who’ve pushed for a debt limit confrontation. “'If these sons-of-bitches want to try to end-run us, game on,” Texas Rep. Chip Roy told the Wall Street Journal.
Room for Disagreement
Senior House Republicans say they’re on course to pass a plan that reduces spending and sets up another showdown on the debt limit sometime next year
“It's definitely gonna have enough votes to pass,” House Ways and Means Chair Jason Smith told Semafor. “I'm confident that we will have 218 votes increase the debt limit with proper items that limit spending.”
- Politico’s Meredith Lee Hill delved into the prospect of big cuts to food stamps and the pressure New York Republicans lawmakers like Molinaro face to shield the program from any reduction. “Constituents have begun pressing them to oppose efforts that would further restrict SNAP and other key assistance following the loss of key pandemic-era aid,” Hill writes.
- The Washington Post also examined McCarthy’s tenuous grasp on the speakership as his first 100 days in power draw to a close.