WASHINGTON — Republican leaders in the U.S. House of Representatives gave more details during a closed meeting Tuesday Tuesday about the secret deals Speaker Kevin McCarthy struck with conservative lawmakers last week to secure the votes he needed to to hold the hammer.
The so-called handshake deal, shown on slides during the weekly GOP conference meeting, if honored, could have significant implications for federal departments and agencies, as well as the global economy. In response, Democrats on Tuesday criticized that the deal could potentially lead to a partial government shutdown, an economic crisis, or both.
According to a government spending and debt limit slide shown during the GOP meeting, published by CNNThe McCarthy deal places limits on when and how the GOP House will take up the annual government bills needed to avoid a partial government shutdown.
The deal also attaches conditions to legislation that would raise or suspend the debt ceiling needed to avoid a first-time default on the country’s debt later this year.
The deal will make it significantly more difficult for House Republicans to negotiate an agreement with the Democratic Senate and Biden administration on both spending and the debt ceiling.
The slide said House Republicans would:
- Adopt a fiscal 2024 budget resolution that balances the budget within 10 years. The 2024 financial year begins on October 1st.
- Pursue “reforms” of the budgetary process and mandatory spending programs. These programs include Social Security, Medicare, and Medicaid.
- Cap FY2024 discretionary spending at or below FY2022 level.
- Approve only expense accounts that comply with the budget decision and all 12 regular expense accounts on time. Congress hasn’t been able to do that since 1996.
- Pass a makeshift spending law or ongoing solution before the fiscal year-end on September 30th.
- Opt out of all dealings with the Senate unless that chamber’s 12 spending bills pass, the bills conform to the House budgetary act, and they reduce discretionary spending outside of defense.
- Don’t agree to a debt ceiling hike without a budget agreement or “proper tax reforms.”
The Republican plans to pass a CR, or rolling resolution, before Sept. 30, suggesting the party doesn’t expect to complete the state funding process for fiscal 2024 by the start of the next fiscal year on Oct. 1.
“An Honest Conversation”
House Majority Leader Steve Scalise said during a Tuesday news briefing that McCarthy disclosed the parameters of the handshake deal during the GOP meeting behind closed doors.
The Louisiana Republican argued that Republicans should force spending cuts to raise the debt limit paid for spending already approved by Congress.
“If we’re about to max out the credit card, before we hit that limit, we shouldn’t have an honest conversation about how to start living within our means, how to make sure we’re not spending money we do don’t have don’t?” Said Scalise.
“And if that happens – at the same time you are dealing with the debt limit – you should also introduce mechanisms so that you don’t constantly exhaust the maximum.”
Scalise said Republicans “haven’t talked about cutting defense spending,” meaning the approximately $130 billion in discretionary spending cuts that would need to take place for the government’s fiscal 2024 funding laws to match fiscal 2022 spending levels , all would come from non-defense discretionary programs.
This side of the federal balance sheet includes hundreds of programs, such as the Department of Agriculture, Army Corps of Engineers, Homeland Security, Department of Energy, National Parks and Forests, Department of Transportation, and Veteran’s Health programs.
Scalise did not elaborate on whether Republicans will push for mandatory spending changes to offset the debt ceiling hike. This side of the federal budget includes Medicare, Medicaid, and Social Security. It’s also growing much faster than the discretionary side, which includes the dozen annual government finance bills.
Democratic Connecticut Rep. Rosa DeLauro, the senior member of the House Appropriations Committee, said during a separate news briefing that Republicans’ calls for a significant cut in domestic spending are a non-starter leading to a partial government shutdown later this year could.
“Approval invoices are must-pass invoices. They require a bicameral bicameral agreement,” DeLauro said. “It seems, in all honesty, that Republicans don’t understand this process because Kevin McCarthy, in his bid to become Speaker, has reportedly already promised to limit spending to 2022 levels in exchange for votes.”
The domestic funding cuts, DeLauro said, would cut “critical investments” in programs aimed at veterans’ mental health services, veterans’ homeless assistance programs, high-poverty schools, early childhood learning programs, access to child care, job training programs and small businesses.
Pennsylvania Rep. Brendan Boyle, the top Democrat on the Budget Committee, warned the GOP against using the debt limit as a political bargaining card.
“The debt ceiling should never be something we mess around with. It is too dangerous. This country has been able to weather and weather government shutdowns. We would not be able to survive a compromise on full trust and credit from the United States,” Boyle said. “It would cripple not just the US economy, but the global economy.”
The Bipartisan Policy Center, a think tank regularly relied on for debt limit projections, said in June that the default date, or X-date, for the debt limit “is unlikely to occur until the third quarter of 2023.”
But Shai Akabas, director of economic policy at BPC, noted in a written statement this week that much has changed since the last forecast was released, including Biden’s student debt forgiveness plan and ongoing court cases, persistent inflation and the pace of rate hikes.
“Any of these could have a significant impact on the X-Date,” Akabas said. “The problem right now is that we don’t have a new baseline to work on and (the Congressional Budget Office) won’t be issuing one until later in January, so we won’t really be able to come up with a comprehensive new projection create until we have this information.”
Akabas said the new standard deadline could now be “sometime mid-year.”
US Senate Appropriations Chair Patty Murray, a Democrat from Washington, and Senior Member Susan Collins, a Republican from Maine, released a joint statement Tuesday saying that as the panel’s new chair, the two will ” look forward to working together bipartisanally here in the Senate to find common ground and move our country forward.”
“Our nation is facing so many pressing challenges right now — both here at home and abroad — and it’s our responsibility as congressmen to do the hard work of listening to one another, finding common ground, and then coming up with sensible solutions to help.” the American people,” they wrote.
“This starts with us funding government in a responsible and non-partisan way – that means marking our budget bills and presenting them on time.”
Efforts by House Republicans to overhaul the annual budget process, as outlined in the slides, could be especially challenging if the party seeks to overhaul the process for all of Congress and not just the House GOP.
The Joint Select Committee on Budget and Approval Process Reform, a 16-member bipartisan body that included members of the House and Senate, spent much of 2018 overhauling the process.
Their recommendations included moving from an annual budget review to a biennial budget review, changing seats on the Senate Budget Committee, and some technical changes. But the plate never reported his referrals to the chamber of the House of Representatives or the Senate.
Arkansas GOP Rep. Steve Womack and Kentucky Democratic Rep. John Yarmuth, now retired, later published their own bill to revise the process, although it never progressed.