Kevin McCarthy Begins To Issue Debt Limit Demands
WASHINGTON — After months of mystery over what spending cuts Republicans would demand from President Joe Biden in return for raising the federal debt limit, House Speaker Kevin McCarthy (R-Calif.) on Tuesday suggested Republicans had begun to coalesce around some ideas.
In a letter to Biden, McCarthy laid out several broad spending cuts, though details of the proposals remain fuzzy.
The letter, in which McCarthy proclaims he has “no interest in brinksmanship,” represents the speaker’s effort to seem like the more reasonable party even though he is the one who has threatened not to support an increase in the federal government’s borrowing limit — potentially risking a financial crisis and recession.
“With each passing day, I am incredibly concerned that you are putting an already fragile economy in jeopardy by insisting upon your extreme position of refusing to negotiate any meaningful changes to out-of-control government spending alongside an increase of the debt limit,” McCarthy wrote. “Your position — if maintained — could prevent America from meeting its obligations and hold dire ramifications for the entire nation.”
McCarthy also complained that Biden has been “missing in action” since the two met back in February — ignoring the fact that the White House released a detailed budget it said would cut the deficit by almost $3 trillion over the next 10 years.
McCarthy’s short list of demands includes several proposals that House Republicans have floated before and that been have met with indifference from the White House and Democrats.
It proposes cutting the annual appropriations Congress makes for government agencies and programs outside of defense to “pre-inflationary” levels. Various House GOP groups have previously proposed cutting such “discretionary” spending to last year’s levels, though it is unclear if McCarthy’s letter endorses exactly that.
Speaker of the House Kevin McCarthy (R-Calif.) conducts a news conference in the U.S. Capitol after the House passed the Parents Bill of Rights on March 24.
The list also includes “strengthening work requirements for those without dependents who can work.” Some federal benefit programs waived work requirements due to the COVID pandemic but those exemptions are likely to end when the public health emergency declared by the White House ends as expected in May.
McCarthy’s list also included clawing back COVID funds that had not yet been spent and unspecified policies to expand the economy and keep Americans safe, such as measures to boost energy production and tighten border security.
The letter echoes proposals made earlier this month by the House Freedom Caucus, the conservative bloc whose members only reluctantly supported McCarthy in his speaker bid.
While Republicans have often talked about their desire to use the leverage provided by the debt limit to make policy changes that could alter the government’s spending trajectory or even balance the budget in 10 years, it’s unlikely the ideas listed by McCarthy, even if agreed to by the White House, would add up to enough to reach those goals.
Notably, McCarthy said his list was not limited to the proposals outlined, leaving him wiggle room to add to them in the future. The letter doesn’t mention Social Security or Medicare, programs McCarthy said Republicans wouldn’t touch.
Senate Majority Leader Chuck Schumer (D-N.Y.) said McCarthy’s latest missive still lacks enough detail for an actual negotiation with Biden.
“Speaker McCarthy says he wants to sit down with the president,” Schumer said Tuesday. “But if he comes to the president’s office with no specific plan, no specific details about what the Republicans want to cut, what are they going to talk about? The weather?”
The Treasury Department has been making various accounting maneuvers to stay just below the $31.38 trillion limit on debt it can issue, but it’s expected to run out of room sometime in the summer or, if spring income tax revenues come in below estimates, as soon as June. Failure to again raise or temporarily suspend the debt limit would lead to dire economic consequences for the nation and possibly the global economy as well, according to economists.