On several occasions during debt-limit negotiations over the last decade, the unpredictable fallout of a looming deadline has helped persuade dozens of lawmakers from each party to begrudgingly support concessions they didn’t love. This time, ideas like beefing up work requirements for food assistance programs aren’t gaining the bipartisan appeal Republicans might have hoped for, while other proposals — like easing permitting for energy projects — might attract enough interest among Democrats to get added to a final deal.
Here’s a breakdown of the particular policy areas in the House Republican bill that might offer an opening for a bipartisan deal, with a clear-eyed assessment of how realistic those hopes really are:
Energy permitting
A sizable share of lawmakers in both parties agree that it takes too long to get permits for energy project construction in the U.S. So House Republicans’ push to streamline permitting rules just might have legs.
But what an agreement would look like, exactly, remains a big question. And Democrats remain resistant to linking energy policy to the debt-limit debate.
“This may be one of the few things we can actually accomplish in this Congress,” Sen. Martin Heinrich (D-N.M.) said. He added that it’s “very clear” Republicans are focused on permitting for oil and gas pipelines, instead of electric transmission lines — an emphasis Democrats could shift.
“They are just out of step with where the economy and country are,” Heinrich said of House GOP lawmakers. “That’s hopefully where the Senate comes in and rebalances.”
Worried that green perks could go to waste from the party-line tax and climate law they cleared last year, many Democrats want the federal government to make it easier to connect clean energy to the grid. Progressives are reluctant to shorten the length of environmental reviews for energy projects, however, for fear that could hurt low-income communities and communities of color.
Details: The House Republican package would streamline permitting reviews for energy projects and mines. But it’s also chock full of partisan priorities like protecting fracking, forcing the sale of oil and gas leases, killing tax benefits for green energy projects and pooh-poohing Biden’s decision to kill the Keystone XL pipeline.
Sympathizers: Sen. Joe Manchin (D-W.Va.) has tried to rally bipartisan support for overhauling energy permitting rules. But he failed last year, as progressive lawmakers argued against changing the rules for environmental reviews and Republicans spurned him for supporting Democrats’ trademark climate law.
In the House, when the chamber first voted in March on the package of energy policies that got rolled into the debt limit package, four Democrats joined as “yeas.” Those supporters included Henry Cuellar and Vicente Gonzalez, who hail from oil-and-gas-rich Texas, as well as centrists Marie Gluesenkamp Perez of Washington and Jared Golden of Maine.
Work requirements
House Republicans are trying to get a handful of swing-state Democrats in the Senate to support tougher work requirements for food assistance programs. But most have resoundingly rejected the idea.
Details: The debt limit bill House Republicans passed last week includes provisions that would expand existing work requirements for the nation’s largest food aid program, often referred to by its acronym of SNAP, along with other emergency aid that low-income families can use to buy food.
Specifically, it requires so-called “able-bodied adults without dependents” who receive SNAP to continue meeting work requirements until they’re 55 years old, rather than the current age limit at 49.
Sympathizers: Manchin has signaled he could be open to beefing up work requirements, potentially backing tighter rules for people who are “capable and able to do it.” House Republicans are quick to highlight Biden’s own embrace of welfare reform during the Clinton administration in the 1990s, when the position was less fraught among Democrats and Biden was a sitting senator — but the stricter work rules getting pushed by today’s GOP go beyond those.
Spending caps
Democrats have insisted that they’re ready to haggle over federal funding for the fiscal year that kicks off on Oct. 1 — just not with the Treasury Department’s borrowing ability at stake.
In order for that to happen, though, Republicans would have to agree to separate government funding caps that aren’t tied to debt-ceiling talks. And that would amount to a major shift from the GOP’s current demand for $130 billion in spending cuts in exchange for a vote to lift the debt limit.
If those talks get decoupled, it’s plausible that both sides could reach an agreement on military spending, since there’s already broad bipartisan support for ensuring the Pentagon gets enough money to at least keep pace with inflation.
Democrats would never sign off on the domestic spending cuts that GOP leaders are seeking. But it’s possible that they could cut a deal with a handful of Republicans — think centrists, purple-state members and appropriators — to keep non-defense funding essentially stagnant, pairing small cuts with increases elsewhere to rein in spending.
Details: The House debt limit bill would cap spending at $1.47 trillion for the upcoming fiscal year, rolling back the clock by two years on federal funding levels. Then for a decade, funding would be allowed to grow by 1 percent every year.
Sympathizers: A slew of moderate Democrats in both chambers have expressed support for fiscal restraint in the abstract, including long-term strategies for stabilizing the national debt like the 2010 budget plan that proposed trillions of dollars in tax increases and spending cuts.
“I am certainly not opposed to working on ways to reduce the debt. I am very, very, very opposed to putting the full faith and credit of the country at risk,” Sen. Jon Tester (D-Mont.), who faces a tough reelection in a red state, has said. “So you know, if we’re talking about doing something like [the 2010 plan], I not only think that’s a good idea, put me on it.”
Ending student loan relief
It’s hard to see Biden negotiating away a major domestic policy achievement that his administration has so vigorously defended in court. Some have even credited the president’s student debt relief plan, announced in the months leading up to the midterm elections, with helping limit Republican gains in the House last November.
A few moderate Democrats have criticized the president’s embrace of mass forgiveness of student loan debt, however, and have signaled openness to a separate Republican effort to nix the relief.
Details: The House GOP bill would overturn Biden’s student loan forgiveness program, which promises up to $20,000 in debt relief per borrower, even as the president’s plan remains in limbo ahead of a challenge at the Supreme Court.
The Republican bill would also block the administration’s new income-driven repayment plan that’s designed to lower monthly payments. And it would permanently curtail the Education Department’s power to create new policies that increase the taxpayer cost of the student loan program.
Sympathizers: When the president rolled out his student loan forgiveness plan last summer, Manchin called it “excessive,” arguing that people need to “earn it” through public service like working for the federal government. Other politically vulnerable Democrats have also spoken against the plan, including Sens. Catherine Cortez Masto of Nevada and Michael Bennet of Colorado, as well as Rep. Chris Pappas of New Hampshire.
Meredith Lee Hill and Josh Siegel contributed to this report.
[ad_2]
#McCarthy #pick #centrist #Dems #debtlimit #ideas
( With inputs from : www.politico.com )
“We will pass it this week,” the Minnesota Republican vowed.
There’s no question it’s a fluid situation for GOP leaders; the conference is not exactly known for ideological harmony, and the margins they’re operating under are tight. Yet McCarthy and his team have been bullish about their ability to pass the massive debt measure this week, after months of internal deliberations with members about their expectations and concerns with the proposal.
And Republican leadership has a warning they hope will keep the conference in line: Failing to unite behind a debt plan will only empower President Joe Biden and the Democrats.
“Your choice is literally going to be, do you want to have a solution and avoid default? Or do you want to give Joe Biden and Chuck Schumer a blank check, with no fiscal reforms whatsoever?” Emmer said. “This is literally putting Republicans in charge of solving the debt ceiling.”
As for the GOP holdouts so far? Emmer argued that they would, ultimately, decide to back McCarthy’s goal of presenting a united front against Biden: “I think all those people understand this is a team effort.”
The list of possible GOP holdouts includes Reps. Nancy Mace (R-S.C.), Tim Burchett (R-Tenn.), Eli Crane (R-Ariz.), Andy Biggs (R-Ariz.), Thomas Massie (R-Ky.) and Chip Roy
(R-Texas), according to people familiar with their thinking and public statements.
There are several sticking points in the plan — which would include across-the-board spending cuts and tightening access to government benefits for low-income people — that have rankled some in the GOP’s slim majority.
One member, granted anonymity to speak candidly and avoid endless whip phone calls, said they are currently a “no” vote because the plan doesn’t do enough to address debt reduction or immediately enact some of the stricter work requirements.
Meanwhile, vulnerable Republicans, especially those in districts Biden won in 2020, are dismissing those concerns posited by their more conservative colleagues. The elimination of certain tax breaks, in particular, is causing headaches for the GOP whip team. The plan would kill some clean-energy tax credits that were included in Democrats’ sprawling policy package last year, including financial incentives for biodiesel that Republicans in midwest states are now adamantly defending.
“The ethanol issue is real. It’s a tough vote for Midwest members,” said one House GOP lawmaker, who was granted anonymity to discuss internal conversations. The lawmaker noted GOP leaders and Emmer’s whip team have been talking to a handful of members “all weekend” who’ve raised concerns about the ethanol-related measures.
Midwestern Republicans with ethanol plants in their districts are especially worried — including Rep. Brad Finstad (R-Minn.), according to three people who were granted anonymity to discuss internal conversations. Finstad has worked to beat back strong GOP primary and Democratic challenges since he won a special election in 2022. Looking soft on ethanol gives both sides ample ammunition against him.
One of the people familiar with conversations said Finstad has raised serious concerns about the ethanol-related provisions, “but not to the point he’s a no.” A spokesperson for Finstad did not respond to a request for comment.
Emmer, for his part, noted that Republicans are already “on record voting against many of these tax credits in the Inflation Reduction Act,” as part of the GOP’s energy bill.
Senior Republicans say they expect to alleviate the ethanol concerns without changing any text, reminding members they‘ve already voted against the measures once. Other Republicans involved also say they’ve privately pointed out to concerned members that “this is a starting point and the odds are truly stacked against any of this stuff remaining throughout the process,” according to a second GOP House member.
But Republicans are quick to note that any lingering concern at this point threatens the legislation, and their negotiating stance, as they push for a final vote.
“We have a four-vote majority. I have concerns on everything,” the GOP lawmaker said.
If Republicans can successfully pass the debt measure this week, it’s a far cry from defusing the debt crisis altogether. McCarthy still needs to convince Biden and Democrats to come to the table — and both groups have already trashed the Republican proposal as a nonstarter. Any further negotiations that could actually earn Democratic support are sure to further rankle the House GOP.
But Republicans would still consider passing their own plan through the House a win, even if it’s just a first step.
McCarthy on Sunday stated confidently that they will be able to do it: “We will hold a vote this week and we will pass it,” he told Fox News’ Sunday Morning Futures. “I cannot imagine someone in our conference that would want to go along with Biden’s reckless spending.”
[ad_2]
#Debtlimit #plan #wont #changed #House #GOP #leaders #holdouts
( With inputs from : www.politico.com )
McCarthy is eyeing to pass his plan in the House next week, setting up a showdown with Democrats amid worries that the U.S. could default on its debt as early as June.
The Republicans’ 300-page-plus bill amounts to a legislative wish list of measures that have no future in the Senate, whose Democratic leaders have joined Biden in refusing to negotiate policy changes as part of the debt ceiling. They argue that lawmakers should raise the borrowing cap — and avert global economic havoc — without conditions, as Congress repeatedly did under former President Donald Trump.
Biden derided McCarthy’s plan during an appearance Wednesday in Maryland, and vowed to reject GOP demands that he roll back his administration’s accomplishments.
“They’re in Congress threatening to undo all the stuff that you helped me get done,” Biden said during an appearance at a Maryland union hall. “You and the American people should know about the competing economic visions of the country that are at stake right now.”
Rep. Jared Huffman (D-Calif.) likewise dismissed the Republican proposal. “It’s pathetic,” he said.
The GOP bill would enact the party’s marquee energy bill, H.R.1 (218), which the House already passed last month. That bill includes an easing of permitting rules for new energy infrastructure and mining projects that Republicans say would promote economic growth, and which might find some appeal among Democrats.
The Republican proposal also includes more partisan elements of their energy bill, which would mandate more oil and gas lease sales on federal lands, ease restrictions on natural gas exports, and repeal a fee that the IRA imposed on methane emissions from oil and gas operations.
Republicans have lambasted the IRA’s clean energy incentives, saying they’re wasteful and distort markets.
“These spending limits are not draconian,” McCarthy said in a Wednesday floor speech ahead of the bill release. “They are responsible. We’re going to save taxpayers money. It will end the green giveaways for companies that distort the market and waste taxpayers’ money.”
Republicans are seeking to repeal the IRA’s zero-emission nuclear power production, clean hydrogen and sustainable aviation fuel tax credits. Their bill would also eliminate the law’s bonus provisions aimed at placing solar and wind facilities in low-income communities and that allow some entities to receive direct payments of the credits.
“We have to create situations where traditional, reliable, resilient energy can compete in the marketplace,” Rep. Kelly Armstrong (R-N.D.) told POLITICO. “If that’s getting rid of some of the crazy renewable tax credits in the IRA, I am all for it.”
Republicans are also proposing to modify several other existing tax credits under the law, including by reestablishing the previous investment and production tax credits for solar and wind that the IRA had extended and increased. The GOP would nix both the production and investments tax credits for green sources after 2024, as well as incentives for paying prevailing wage, using domestic content and placing facilities in communities historically dependent on fossil fuels.
The proposal would eliminate changes to some tax credits that existed before Democrats’ IRA was enacted, including for carbon sequestration.
And it would make major changes in the IRA’s electric vehicle tax credit, whose implementation by the Biden administration has taken bipartisan criticism. The GOP proposal would revive a prior $7,500 tax credit for qualifying electric vehicles, but would restore that tax break’s per-manufacturer limit of 200,000 vehicles. It would entirely repeal the IRA’s new incentives for critical battery minerals that are extracted from the U.S. or a close trading partner, and for batteries manufactured or assembled in North America.
While some moderate Republicans called for party leaders to place a priority on policy measures that could draw bipartisan support — such as overhaul permitting rules — as part of the debt ceiling package, conservatives pushed for more partisan measures targeting Democrats’ climate law.
But that could put some Republicans in a tricky spot, because many projects that could receive the IRA’s tax credits are set to be built in congressional districts represented by GOP lawmakers. Recent analysis from the American Clean Power Association found that there have been $150 billion in new clean power capital investments since the law’s August passage, including 46 utility-scale solar, battery and wind manufacturing facilities or facility expansions.
Of the manufacturing announcements tracked by ACP where a congressional district was known, the majority of those facilities were in red districts.
“There is a lot of stuff in the Inflation Reduction Act that should be repealed,” Rep. Jeff Duncan (R-S.C.) told POLITICO. “But there is some common sense stuff that was in there as well.”
[ad_2]
#House #GOPs #debtlimit #plan #seeks #repeal #major #parts #Democrats #climate #law
( With inputs from : www.politico.com )
The introduction of that plan and Biden’s speech demanding a debt limit hike with no strings attached represented significant steps in a standoff with major financial and political implications. The debt limit clock is ticking, with experts predicting the U.S. could default as early as June.
The House GOP proposal would raise the debt limit by $1.5 trillion, or through March of next year — whichever comes first — ensuring Biden has to relitigate the issue with House Republicans before voters pick the next president. It also cuts federal funding by $130 billion in the upcoming fiscal year, turning back discretionary spending totals by about two years.
Actually passing the bill is likely to prove complicated, however — rank-and-file Republicans aired internal frustration about the path forward during a closed-door conference meeting this week. But already, McCarthy is seeking to put the onus on Biden and top Democrats to make the next move in the debt limit standoff.
“They have no more excuse to refuse to negotiate,” the speaker said on the floor after privately briefing Republican lawmakers. “President Biden has a choice: come to the table and stop playing partisan political games, or cover his ears, refuse to negotiate, and risk bumbling his way into the first default in our nation’s history.”
The president and speaker haven’t communicated on the looming debt crisis since February, prompting McCarthy’s bill proposal and subsequent planned vote next week. The GOP plan aims to repeal a swath of clean energy tax credits, in addition to yanking back tens of billions of dollars that Democrats included for IRS enforcement in their signature tax, climate and health care bill last year. The proposal would also end Biden’s pause on student loan payments and interest, block his student loan forgiveness plan and increase work requirements for “able-bodied adults without dependents” receiving SNAP benefits.
It would also claw back unspent pandemic aid, ease permitting requirements for energy projects and overhaul other welfare requirements, including for Medicaid.
Biden began speaking just minutes after the plan’s introduction. But in his remarks, he still accused McCarthy of advancing a plan that would benefit only the wealthy and major corporations and vowed to reject GOP attempts to roll back his administration’s accomplishments in exchange for averting a financial catastrophe.
“They’re in Congress threatening to undo all the stuff that you helped me get done,” he said. “You and the American people should know about the competing economic visions of the country that are at stake right now.”
The White House has repeatedly dinged McCarthy for delaying a release of a budget proposal that would theoretically outline the Republican goals for slashing the federal deficit. That budget plan now appears indefinitely on ice as the speaker presses ahead toward passage of his debt-limit offer.
The news late last week that McCarthy would issue a debt-limit proposal rather than a budget prompted a flurry of strategizing inside the administration ahead of its unveiling, as officials gamed out options for a response. But McCarthy’s decision to stock the plan with a wish-list of conservative priorities — combined with doubts over whether it could win enough GOP support to pass the House — left Biden officials unconvinced there’s any reason to budge off their current hardline stance.
“They say they’re going to default unless I agree to all these wacko notions they have,” Biden said, singling out McCarthy for risking a default that would leave the nation “devastated.”
McCarthy said he would use passage of his proposal, which includes deregulatory and energy moves beyond spending cuts, to keep pushing for a sit down with Biden. The 320-page debt-limit package was strategically sponsored by House Budget Chair Jodey Arrington (R-Texas), who would naturally be the lead sponsor of the traditional budget resolution Democrats have been pressuring House Republicans to unveil and approve.
The White House, however, insists there is nothing Republicans can offer that will convince them to compromise over the debt limit. Biden officials in recent days have worked to maintain a united front among Democrats on Capitol Hill, warning that a debt ceiling negotiation would set a dangerous precedent.
Biden personally called Majority Leader Chuck Schumer and top House Democrat Hakeem Jeffries on Tuesday to stress that there would be no negotiation, a Democratic aide said.
The White House also distributed two memos to congressional Democrats this week detailing support from economists and business leaders for a clean increase, as well as polling showing broad opposition to the cuts included in the GOP bill.
Democratic senators quickly made clear that Republicans’ opening offer is doomed if it reaches the upper chamber.
“There are no policy concessions that should ever be attached to avoiding default — it doesn’t matter which policy concessions they are,” said Sen. Brian Schatz of Hawaii, adding that Senate Democrats remain “100 percent” behind that stance.
Still, Democrats’ universal panning of the GOP proposal masked growing urgency among lawmakers to make progress toward a resolution. Budget forecasters now predict the nation could hit its borrowing limit earlier than expected. The approaching deadline has motivated a bipartisan group of House moderates to try to craft a potential fallback compromise, while sparking broader speculation across the Hill over the potential for a short-term extension that might buy Congress more time.
McCarthy has vowed to push through his legislation, blasting the upper chamber on Wednesday for what he portrayed as legislative laziness.
The Senate “named March maple syrup month and then yesterday they congratulated UConn on winning the national championship. It’d be interesting if the Senate ever does anything,” the speaker said.
But on Wednesday, Biden indicated that the proposal would have no effect on the White House’s own set of demands.
“Take default off the table, and let’s have a real, serious, detailed conversation about how to grow the economy, lower costs and reduce the deficit,” he said.
Olivia Beavers and Caitlin Emma contributed to this report.
[ad_2]
#Biden #rejects #McCarthys #debtlimit #plan
( With inputs from : www.politico.com )
After the U.S. technically reached the $31.4 trillion debt limit in late January, the Treasury Department started taking “extraordinary measures” to keep the country from defaulting. That wonky process, which involves accounting maneuvers that reduce certain types of government debt, gave the nation a borrowing cushion of about $800 billion at the beginning of February.
But the government has many bills to pay, including sending out money to support Medicare providers, veterans benefits, Social Security checks and assistance to state and local governments.
Federal taxes come due in April, sending billions into government coffers and ensuring the country is safe from default through most of the spring. The day when the country can no longer meet its financial obligations, known as the X-date, is heavily dependent on whether those tax receipts meet, exceed or fall short of expectations.
Predicting how much cash the government will bring in during tax season is always difficult. Last year, for example, estimates from Congress’ nonpartisan budget office lowballed by about $500 billion what turned out to be record-setting revenue. This year, a difference of a few hundred billion dollars could buy — or cost — the country several months of leeway.
By late spring, the pendulum typically shifts to the spending column. If tax revenue comes in low, the nation could come extremely close to defaulting. If tax season is particularly fruitful, the extra money could keep the U.S. from defaulting until late summer or early fall — and likely keep markets rosy in the meantime.
On June 15, quarterly tax payments are due, an influx that could help buoy the nation’s cash through July. While that revenue bump is smaller than the regular tax season, quarterly payments usually bring in tens of billions of dollars as corporations, self-employed people and some other taxpayers hand over their estimated dues.
On June 30, the Treasury Department is allowed to extract about $140 billion in borrowing power from a key federal retirement fund. The accounting maneuver doesn’t affect any workers’ savings or prevent any retirees from getting their cash.
The federal government tends to run a deficit in late summer. And, by all estimates, the U.S. is most likely to reach the brink of default in August or September.
That’s an unfortunate timeframe for Congress’ 535 lawmakers, who want to escape Capitol Hill for their scheduled August recess but also historically seem incapable of reaching a bipartisan deal well in advance of a hard deadline.
More quarterly tax payments roll in on Sept. 15. If the U.S. hasn’t run out of borrowing power by then — and if Congress still hasn’t raised the debt limit or passed a short-term patch — that mid-September revenue bump will add billions of dollars to whatever borrowing authority the country has left.
With no substantial revenue coming in during October, available cash will wane quickly at this point, if it even lasts that long.
The timeline is uncertain, highly subject to the whims of federal cash flow. Despite those dangers, congressional leaders and the White House are virtually nowhere in their discussions to lift the borrowing cap.
[ad_2]
#Brace #debtlimit #whiplash #risky #split #Congress
( With inputs from : www.politico.com )
The party’s list of potential demands — which includes an across-the-board cut to discretionary spending and stricter work requirements on programs like food stamps — is likely to change as House Republicans hash out a formal bill over the coming weeks. One big flashpoint: They’re proposing to raise the debt limit for just one year, triggering another battle over the federal purse in the middle of the 2024 presidential primaries.
The Republican lawmaker close to the talks, who spoke candidly on condition of anonymity, called leadership’s forthcoming proposal “just an opening salvo” and said there’s no specific whip count of support underway yet.
But McCarthy and members of his leadership team are hard at work behind the scenes. That includes two months of rank-and-file “listening sessions” with House Majority Whip Tom Emmer (R-Minn.) — six to 10 members at a time — and broader talks led by McCarthy and Rep. Garret Graves (R-La.) among various factions within the conference, designed to solicit ideas.
“Certainly leadership wouldn’t put this on paper … without having spoken to a number of people,” Republican Study Committee Chair Kevin Hern (R-Okla.) said, estimating that he had been in no less than 10 of those meetings in the last few months.
“This is a culmination of all the conversations from leadership, from speaker from majority leader from the whip, talking to so many people over the last … 85 days about what they’d like to see in a debt limit deal. And that’s why you’re seeing this,” he added.
The stakes couldn’t be higher for McCarthy. The California Republican must avoid a misstep that would weaken his speakership — which any single frustrated member could force a vote to terminate. And unlike other GOP agenda items, which satisfy the party base despite their slim chances of becoming law, any debt-ceiling moves are bound to draw internal criticism while possibly exacting economic consequences.
McCarthy is slated to deliver a speech Monday at the New York Stock Exchange that’s expected to focus on the debt limit. The flurry of new activity comes as the nation’s borrowing power to pay its bills is set to run out as soon as this summer.
Privately, Democrats close to party leadership said the entire GOP list is a nonstarter. President Joe Biden’s party continues to insist it will accept nothing other than a clean debt limit lift.
In addition, McCarthy will have to contend with several cooks in his own financial kitchen. No less than four factions within his conference are already floating their own ideas as they try to shape McCarthy’s initial bid.
The more centrist Main Street Caucus, in a letter to McCarthy on Thursday, reiterated its support for the California Republican, while outlining its own debt priorities. Those include clawing back unspent coronavirus relief cash, reversing Biden’s student loan relief moves and forming a commission that would propose ways to shore up Medicare and Social Security without cutting benefits.
“This letter outlines those proposals that have garnered the most support from our caucus, and we have every confidence they can secure 218 votes in the U.S. House of Representatives,” Main Street Chair Dusty Johnson (R-S.D.) and Vice Chair Stephanie Bice (R-Okla.) wrote. Some of their ideas are also included in GOP leadership’s draft proposal.
The bipartisan Problem Solvers Caucus has also presented its own ideas to members in Zoom meetings over the recess.
Meanwhile, Hern has not only put out a debt “playbook” for the Republican Study Committee, but is now pushing for a specific timeline. He added that while leadership had to be wary of “deal killers,” Republicans are well-positioned to be able to hold a vote by the end of this month.
To bolster his push to hold a debt vote quickly, Hern is delaying the release of his group’s balanced budget proposal, which he had previously vowed would be out by April 15, until May.
The Republican Study Committee moves are in addition to those by the ultra-conservative House Freedom Caucus, which sparked grumbles from across the conference when it publicly outlined its thinking on the debt ceiling — though its chair, Rep. Scott Perry (R-Pa.), stressed that the group wasn’t making “demands.”
Republicans involved in the talks said their members understand the need to coalesce behind a single debt measure. Their goal: Convince Democrats that they’re serious about slashing spending.
“We need to get to 218 votes, get it passed with the most conservative 218 votes in the conference and get it sent to the Senate — and then let the president and the Democrats in the Senate tell the American people why they didn’t want to change the direction of the spending that’s caused the inflation that we’re seeing today,” Hern said.
The GOP’s list, which is widely circulating on K Street, does not include not everything that will go into the debt limit bill, according to a half dozen people close to Republican leadership.
While the party hasn’t formally decided how much in across-the-board spending cuts to support, Republicans are clear that they plan to pare back large chunks of discretionary spending to fiscal year 2022 levels. The GOP’s proposal includes a 1 percent uptick each year after that, though some Republicans have called for more stringent spending cuts.
Others in the GOP conference are agitating for caps on defense spending, too, creating another likely conflict with colleagues who don’t want to trim the Pentagon.
What’s not included in the emerging GOP proposal: A conservative push to claw back $80 billion for tax enforcement that was included in Democrats’ tax, climate and health bill last year. Also left out are border policies pushed by Rep. Chip Roy (R-Texas) and others on the right.
Caitlin Emma, Meredith Lee Hill and Olivia Beavers contributed.
[ad_2]
#McCarthy #prepares #opening #debtlimit #bid #full #potential #pitfalls
( With inputs from : www.politico.com )
While Republican supporters bill the measure as a way of reducing blowback, Democratic leaders argue that even debating it fuels a risky and dishonest theory that it’s possible to avert irreparable economic damage without raising the debt limit. Since GOP lawmakers keep talking it up, however, Democrats are happy to exploit the tricky politics of the convoluted proposal.
“As a Democrat, I actually look forward to them voting to put foreign investors ahead of American families for payment,” said Senate Budget Committee Chair Sheldon Whitehouse (D-R.I.). “I’m not sure that’s the message they want to take to the public in 2024, but God bless them if they do.”
The reality that the GOP bill would prioritize foreign obligations over domestic bills, from paying the military to food stamps, might seem like a political gift to Democrats. But President Joe Biden’s party is also concerned about the effort for a wonkier reason, warning that it’s a ploy to make the public more comfortable with taking the country up to and even beyond, the debt-limit brink for the first time in history.
And Democrats say that attitude from their opponents could portend economic trouble this summer as investors gauge Congress’ appetite for risk.
“They are composing an imaginary world in which the debt limit has been breached and there is not catastrophe,” Whitehouse said. “This bill normalizes that. I think it’s a very dangerous thing.”
The House bill now awaits floor action after earning committee approval earlier this month from the chamber’s tax panel. A vote hasn’t been scheduled, but McCarthy promised it would come to the floor as part of his list of January commitments to lock in his leadership post.
Supporters of the bill are now seeking the same style of last-ditch, closed-door concessions on the debt limit, Whitehouse said, accusing Republicans of using the issue as a “hand grenade” to “force Biden into a back room where they can make some deal without the public knowing what they want.”
GOP leaders have added more exceptions to their plan, giving the Biden administration the authority to dole out Social Security and Medicare benefits by borrowing beyond the debt limit.
“I’m actually surprised my colleagues on the other side aren’t supportive of this legislation,” House Ways and Means Committee Chair Jason Smith (R-Mo.) said before his panel approved the measure this month. “After all, the bill says we will never default on our debt and seniors will always be protected.”
Under the bill, Treasury Secretary Janet Yellen would have to prioritize making payments to the Pentagon and veterans. But the secretary couldn’t borrow extra money to do so. Payments for items like government travel and lawmakers’ salaries would be put last.
Yellen and many Treasury secretaries before her have said government systems aren’t capable of carrying out an elaborate prioritization scheme, that adjusting millions of payments from the federal coffers each day would be logistically impossible. Plus, the bill’s opponents say freezing payments for government contractors, the entire federal workforce, retirees with government-backed pensions, state and local governments — and everything else besides Social Security, Medicare and U.S. debt holders — would be economically calamitous alone.
But arguments that the bill won’t become law and wouldn’t work anyway are minor, Democrats say, compared to the main point: the message it sends to the public.
“It is acknowledging that a default is okay, which is absolutely ridiculous and dangerous,” said Sen. Ben Cardin (D-Md.), chair of the Small Business Committee.
“If we don’t pay our bills on time to anyone, it’s a default,” Cardin added. “The credit cost of the United States goes up immediately. Our bond ratings change. It is a disastrous course.”
Of course, Democrats’ doomsday predictions play in their favor in debt-limit negotiations. Historically, every time the two parties have debated a remedy right up to the deadline, they struck a last-minute bipartisan deal to head off economic havoc as Wall Street investors grew increasingly skittish.
“A responsible president would stand up and say, under no circumstances whatsoever will the United States default on its debt. Biden doesn’t want to say that because he wants to scare the markets by threatening a default,” said Sen. Ted Cruz (R-Texas).
Over the last decade, Cruz has stayed an outsider as his GOP colleagues repeatedly helped Democrats raise the debt limit at the last minute, alienating the most fiscally conservative lawmakers in both chambers who weren’t ready to cut deals until their demands were met.
In 2013, when he was a first-term senator, the Texan insisted Obamacare be defunded as a condition of raising the nation’s borrowing limit. That demand led to a 16-day government shutdown and took the country within one day of defaulting.
Now, Cruz argues that House Republicans’ bill to limit the effects of default would ensure Democrats can’t use the fear of economic calamity to avoid negotiating fiscal changes.
“To date, Democrats have opposed that because they would rather scaremonger than actually reach a reasonable compromise on spending and debt,” Cruz said.
Republicans’ gambit feels all too familiar for the lawmakers who were around 12 years ago when the debt-limit standoff spurred a downgrade of the U.S. credit rating for the first time in American history. Republicans were also advocating debt prioritization bills back then.
“What we’re seeing is a rewind of 2011 on steroids,” said Sen. Chris Van Hollen (D-Md.), who was a House member then. “They really need to pull back from the brink, because they’re gonna crush the American economy if they stay on this path.”
The U.S. could fully exhaust its borrowing authority in less than three months, as early as June if revenue comes in lower than usual this tax season. At best, the Treasury Department will be able to scrap along through summer and possibly into the fall using the cash-conservation tactics the government calls “extraordinary measures.”
“Nobody knows exactly how long the extraordinary measures last. Well, what if it doesn’t last as long?” said one Republican lawmaker, speaking on the condition of anonymity to avoid being associated with concerns about defaulting.
“I don’t think we should be dinking around with it.”
Olivia Beavers and Caitlin Emma contributed to this report.
[ad_2]
#Normalize #doomsday #Dems #lambaste #GOPs #latest #debtlimit #gambit
( With inputs from : www.politico.com )
The president’s “no negotiations” playbook comes after more than a decade of hostile debt fights, during which Biden was often an influential dealmaker. When Democrats fired up bipartisan talks upfront, like in 2011, it ended in major spending cuts and economic fallout. When they wouldn’t engage from the beginning, like 2013, House Republicans eventually unraveled their own ultimatums.
Having lived that history, Biden now continues to goad House Republicans to show they can rally around a plan for fiscal reforms, as the nation approaches the threat of a summer default on its more than $31 trillion debt.
If the past is prologue, the strategy is still a setup for an economically bruising impasse that ends with some budget concessions. Over the last decade, Democrats were often willing to eventually agree to more minor fiscal changes than the deep spending cuts their colleagues initially sought.
“If the president looks back at recent history and is fair-minded about it,” said Sen. John Kennedy (R-La.), “what he will see is that it’s always a negotiation process.”
Many Democrats argue there are two significant but nuanced differences between the current debate and past debt-limit deals: first, that the party demanding concessions hasn’t made an offer; second, the growing concern that, this time, Republicans would let the nation default on its debt if they can’t extract their tradeoffs.
“If they’re willing to actually pull the trigger, then that’s the difference,” said Senate Budget Committee Chair Sheldon Whitehouse (D-R.I.).
Here’s how negotiations went down the last 10 times Congress acted on the debt limit:
Ceiling at the time: $28.4 trillion
How it went down: Just as they’re doing this year, Republican lawmakers insisted in 2021 that they wouldn’t vote to raise the debt limit without major changes to the federal government’s spending habits.
But things were different from the current standoff in one big respect — Democrats controlled both chambers of Congress and the White House at the time, giving them the power to raise the limit on their own. But they made a concerted decision not to.
With slim majorities in the House and Senate, Democrats could have used filibuster protections afforded by congressional budget rules to hike the nation’s borrowing limit without any Republican help. Instead, they zipped up their budget measure without any mention of the debt limit, effectively challenging Senate Republicans to help them avert a disaster.
In the end, both sides caved a little, joining forces to punt for two months and then to create a one-time filibuster loophole that allowed Senate Democrats to raise the cap with a simple majority vote.
Concessions: No major fiscal changes were tied to the deal. But it delayed some cuts to Medicare and other health programs.
How close? The brinkmanship rattled Wall Street for almost three months, exacerbating stock volatility as the Treasury Department came just one day away from defaulting on U.S. debt by the time Congress finally acted.
Ceiling at the time: $22 trillion
*The limit was waived for two years, allowing $6.4 trillion in new debt.
How it went down: Donald Trump didn’t want a market-rattling debt crisis a year before his reelection bid. Steven Mnuchin didn’t want to be the first Treasury secretary to lead the nation through a default. And lawmakers in both parties were keen on ensuring the debt limit wouldn’t plague them right before the 2020 elections.
With that common interest, Mnuchin and former House Speaker Nancy Pelosi conducted high-stakes talks for weeks, as the Treasury chief led negotiations for the White House. Mick Mulvaney, Trump’s acting chief of staff at the time, and Russ Vought, then the White House budget chief, were also in the mix, both unsuccessfully pushing to freeze federal spending.
Mnuchin and Pelosi ultimately hammered out a two-year budget deal that provided a bigger funding boost for domestic programs than it did for the military, in a win for House Democrats. Trump even took to Twitter to whip Republican support in the House, with limited success.
Only 65 out of 197 House Republicans ended up voting for the measure, with most rejecting the pleas from Trump and their own leadership.
Concessions: The two-year deal raised spending caps by about $320 billion. If the two parties had not struck a deal, $126 billion in sequestration cuts would have set in, ravaging every discretionary account in the federal government.
How close? Trump signed the bill about a month before the U.S. was expected to default.
Ceiling at the time: $20.5 trillion
*The limit was waived for 13 months, allowing $1.5 trillion in new debt.
How it went down: What started as a classic bipartisan budget deal devolved into a brief government shutdown.
After months of closed-door negotiations, then-Senate Majority Leader Mitch McConnell and then-Minority Leader Chuck Schumer locked in a plan to raise spending caps, increase the debt limit and fund the government.
Then-President Trump gave his blessing, and the deal enjoyed bipartisan support in both chambers. But Rand Paul wasn’t happy, and the Kentucky Republican temporarily blocked the bill from passing the Senate, demanding a vote to strip the debt limit increase from the package and keep the government under strict budget caps.
There was drama in the House, too. Then-Minority Leader Pelosi tried to whip her caucus to oppose the bill, protesting Republican inaction on honoring legal status for young undocumented immigrants and delivering an eight-hour floor speech on the issue. But the California Democrat failed to tank the vote, with 73 Democrats supporting passage.
Concessions: The bipartisan agreement raised military and non-defense spending caps by about $300 billion over two years and provided nearly $90 billion in disaster aid.
How close? The debt-limit suspension came about a month before Treasury was set to fully exhaust its borrowing authority.
Ceiling at the time: $19.8 trillion
*The limit was waived for three months, allowing $700 billion in new debt.
How it went down: In a move that shocked Hill Republicans, Trump unexpectedly sided with Democrats to back an offer that waived the debt limit and extended government funding for three months, while providing disaster relief for Hurricane Harvey.
Trump’s support for the hurricane and fiscal relief patch dealt a blow to the rest of his party. Fellow Republicans saw him as abandoning any shred of GOP leverage while Democrats pushed to negotiate a high-stakes year-end government funding and debt-ceiling deal, in addition to an immigration overhaul, all in quick succession. The GOP had originally hoped to extend the debt limit through the 2018 midterm elections.
Concessions: The package provided $15 billion in emergency funding to aid recovery from Hurricane Harvey, the storm that made landfall in Texas and Louisiana that summer, killing more than 100 people and causing well over $100 billion in damage.
How close? The deal was signed into law just weeks before the U.S. was forecast to default on its loans.
Ceiling at the time: $18.1 trillion
*The limit was waived for about 16 months, allowing $1.7 trillion in new debt.
How it went down: The debt ceiling suspension was part of a closely held, last-minute budget deal Republican congressional leaders struck with then-President Barack Obama, as much of Washington was distracted by then-Speaker John Boehner’s resignation announcement.
Just 12 days before the U.S. was set to default, Boehner and McConnell told Obama they couldn’t pass a “clean” debt ceiling increase, with Republicans demanding entitlement changes and Democrats pushing for more domestic spending.
So the trio embarked on speedy talks that resulted in a two-year budget accord, ultimately ending years of bitterly partisan fiscal battles exacerbated in part by the rise of the Tea Party. The agreement took the debt ceiling off the table for the rest of Obama’s presidency and capped Boehner’s career in Congress, after the Ohio Republican’s long struggle to keep his conference in line.
Concessions: Both sides emerged from the breakneck talks claiming wins. Democrats lauded domestic spending increases and some tweaks to Social Security and Medicare, and Republicans celebrated more money for the military and changes to entitlement programs. Democrats and Republicans were also able to relax the discretionary spending caps that had been put in place years earlier, squeezing priorities on both sides of the aisle.
How close? Obama signed the bill one day before the government was set to max out its borrowing authority.
Ceiling at the time: $17.2 trillion
*The limit was waived for about 13 months, allowing $900 billion in new debt.
How it went down: The White House and congressional Democrats refused to accept anything but a “clean,” one-year debt limit increase. Boehner, unable to rally enough support from within his GOP ranks for any kind of debt hike, ultimately had to rely on Democrats to push the measure through the House.
Boehner was forced to capitulate despite his prior insistence that any debt ceiling increase must be accompanied by “significant spending cuts and reforms to reduce our debt.” Senate Republicans also didn’t protest the measure; they were more concerned about getting out of town before a snowstorm than getting mired in a fiscal fight. With only 45 seats in the Senate, Republicans also weren’t in a position to drive policy.
Boehner had floated a number of policy sweeteners in an effort to win support from House Republicans, including Obamacare changes and a reversal of cuts to military pensions. But rank-and-file Republicans rejected each offer, and several dozen hardline conservatives refused to raise the borrowing limit no matter what.
Concessions: No strings attached this time.
How close? Treasury was expected to run out of cash-conserving tricks in less than a month.
Ceiling at the time: $16.7 trillion
*The limit was waived for about four months, allowing $500 billion in new debt.
How it went down: Boehner promised a “whale of a fight” as debt limit talks heated up that summer. It was, and he lost.
Similar to this year’s dynamic, Democrats made a pact to negotiate nothing until Republicans helped waive the debt limit and fund the government. One assumption underpinned that strategy: House Republicans, even with a hearty majority, couldn’t pass any debt limit remedy on their own thanks to conservative resistance.
And indeed, Republicans insistent on killing Obamacare ended up crushing every idea Boehner proposed for handling the debt limit and funding the government. The House impasse spurred a 16-day government shutdown and took the nation to the brink of debt default.
Throughout the protracted fight, interpersonal drama erupted within both parties. Then-Senate Majority Leader Harry Reid was mad about concessions Biden had made during previous debt-limit negotiations and shut the then-vice president out of direct negotiations with lawmakers. Many Senate Republicans turned on Sen. Ted Cruz as the Texas Republican led the anti-Obamacare push.
Finally, a bipartisan deal born in the Senate ended the government shutdown and staved off debt default. Not a single House Democrat voted against the plan, while 144 of the chamber’s Republicans — more than 60 percent — opposed the bill despite urging from their leadership. Across the Capitol, 81 senators voted yes, with 18 Republicans opposed.
Concessions: The deal included a plan for House and Senate leaders to appoint negotiators to hash out a budget agreement by mid-December that year, while giving Congress formal power to disapprove of the debt-ceiling increase.
How close? Congress got the debt-limit suspension to Obama’s desk with one day to spare before Treasury expected the government would default.
Ceiling at the time: $16.4 trillion
*The limit was waived for about four months, allowing $300 billion in new debt.
How it went down: Republicans began with demands for dollar-for-dollar spending cuts to match any increase in the nation’s borrowing cap. Democrats wanted the debt limit waived past the 2014 midterms, an election that ended up relegating them to the minority in both chambers.
In the end, the two parties agreed to much less on both fronts.
Concessions: Along with suspending the debt limit for about four months, Congress passed a “no budget, no pay” plan, barring lawmakers from getting paychecks if they didn’t pass a budget by mid-April of that year.
How close? The deal came together just weeks before Treasury was expected to default.
Ceiling at the time: $14.3 trillion
How it went down: With its vivid imagery of a “fiscal cliff,” this standoff is remembered as the most economically devastating debt limit brawl in U.S. history thus far. It also marked Republicans’ biggest win on demands for new spending controls. And two familiar faces are credited with saving the day: then-Vice President Joe Biden and McConnell, who was Senate minority leader at the time.
While Obama and then-House Speaker John Boehner sealed the final deal, Biden’s longtime connection with McConnell led to the breakthrough, according to lawmakers, congressional staff, administration aides and Democratic officials familiar with the talks.
After the House speaker rejected an initial spending-cuts plan, McConnell paused talks with Biden, giving Boehner breathing room to appease his caucus with an attempt to pass their own debt-limit plan (it failed). Then, when the time was right, McConnell dialed up Biden with an idea for a workaround — and it worked.
Still, the Republican majority in the House wasn’t united enough to carry the vote alone, and GOP leaders called for help across the aisle. Then-House Minority Whip Steny Hoyer (D-Md.) and then-Minority Leader Pelosi swallowed their objections to the plan and whipped their own as the vote remained open. The final House count: 174 Republican ayes, 66 Republican nays. Democrats split evenly, 95 on each side.
Concessions: The deal created a decade of spending caps for both military and non-defense programs, with the aim of saving more than $900 billion over that time. It also set up the threat of across-the-board cuts. The Pentagon, domestic programs and Medicare would all face the chopping block if Congress didn’t act to prevent that slashing.
How close? The talks got so intense and dragged on so close to the brink of default that the Standards and Poor’s credit rating agency downgraded the nation’s status as a borrower — the only time the U.S. has lost its A+ badge as a firmly trusted debtor. Even rumors of a downgrade that year caused the Dow Jones Industrial Average to swing by more than 400 points.
Just before the final deal came together, Obama privately braced for the possibility that then-Treasury Secretary Tim Geithner would need to prepare the country for a market crash.
Ceiling at the time: $12.4 trillion
How it went down: In another echo of the current debt fight, fiscal conservatives made it tough that year to rally enough votes to raise the borrowing limit. But back then, in the pre-Tea Party era, it wasn’t Republican conservatives causing the most trouble — it was Democrats of the Blue Dog persuasion pushing hardest for spending restraint.
Democrats controlled Congress and the White House, and still it took them weeks of negotiations among their own party leaders to lock in a deal that narrowly cleared both the House and Senate.
Coming off the so-called Great Recession, then-President Obama and congressional leaders were prepared for years of red ink amid waning tax revenue. And moderate Democrats were demanding new fiscal controls.
Democratic leaders even called on former President Bill Clinton, nearly a decade after his tenure in the White House, to sell the caucus on the idea that new spending restrictions would remind voters their party “had a better record on fiscal discipline” than the GOP. Biden, as the lead proxy for Obama, worked his Senate ties.
Following Senate passage, without a vote to spare, then-Speaker Pelosi whipped alongside House Blue Dog leaders, prevailing 217-212 to raise the debt limit despite 37 defections.
Concessions: The deal reinstated “pay-go” budget rules similar to those credited with helping rein in deficits in the 1990s. Obama heralded the restraints, describing them as “a simple but bedrock principle: Congress can only spend a dollar if it saves a dollar elsewhere.”
To win over moderates in the Senate, including then-Budget Chair Kent Conrad (D-N.D.), Obama also promised to create an 18-member fiscal commission to recommend more steps to reducing the deficit.
How close? Federal debt could have exceeded the limit in less than a month if Congress hadn’t acted then.
Nancy Vu and Beatrice Jin contributed to this report.
[ad_2]
#debtlimit #time #machine #big #fights
( With inputs from : www.politico.com )
