Republicans challenge White House to deal with debt
The House passes a plan to reduce spending, but Biden refuses to negotiate
Congressional whips deal in disagreement. They are charged with gathering support for a bill—sometimes by cutting a deal, creating common ground, or maintaining a fragile unity behind the scenes.
“Political compromise was never considered a political weakness before, and it shouldn’t be,” U.S. Rep. Don Bacon of Nebraska told me. He is the Republican whip for the bipartisan Problem Solvers Caucus.
“The majority of Americans are not extreme to one side or the other and expect us to work together and accomplish things for them,” he said.
On Wednesday afternoon, Bacon helped pass the Limit, Save, Grow Act of 2023 in the House. The 320-page bill provides a starting point for spending negotiations between the White House and Republicans. For now, that starting point looks more like a GOP wishlist than a bill that could realistically make it to President Joe Biden’s desk.
The bill, spearheaded by House Speaker Kevin McCarthy, outlines how the Republican-led chamber hopes to address the nation’s debt and financial needs. With the United States quickly burning through cash reserves and unable to borrow more for the time being, the plan looks to cut down on the nation’s expenditures while increasing the debt ceiling before the country runs out of money in early summer.
The proposal calls for capping federal discretionary spending, increasing the debt limit by $1.5 trillion, and reversing many of the Biden administration’s legislative priorities. It would remove a number of clean energy tax credits, recall unspent COVID-19 relief funds, and halt the administration’s pending plan to pay off student loans, which is presently held up in court. A large portion of the bill also focuses on strengthening domestic production of oil and natural gas.
At the heart of the proposal is a strategy to address the country’s whopping deficit, which last year hit $1.38 trillion. To bring that number down, the proposed plan would hold discretionary spending to 2022 levels. Discretionary spending, one of the two categories of federal outlays, accounts for all government spending that isn’t required by law—including military funding. The plan would increase discretionary spending by 1 percent per year for the next 10 years.
“Capping discretionary spending is more politically feasible than capping total spending,” said Jared Pincin, a professor of economics at The King’s College. “It’s a good first place to start. … That’s where most of the savings are going to come from over the next 10 years. Do [spending caps] work? That’s an open-ended question. If it can just be overridden by a simple majority, it doesn’t have any teeth.”
Pincin said both the federal government and states have used spending caps successfully in the past. In 2011, the U.S. implemented a spending cap through the Budget Control Act that helped taper spending for a time. But before long, congressional action pushed past its restrictions.
At the state level, there are longer-enduring examples such as Colorado’s Taxpayer Bill of Rights. The policy is embedded in the state’s constitution and proportionally ties the amount a state can tax and spend to factors like population and inflation. Colorado’s expenditure limit has been in place for 30 years and has saved taxpayers in the state billions, according to the state’s fiscal reports. Only a supermajority in the state legislature can change it.
Critics of tax expenditure limits like Colorado’s argue they stymie a government’s ability to react to crises and prevent growth in areas that depend on government spending like infrastructure. Pincin acknowledges that spending caps make it harder to limit priorities at a federal level—where spending has to reflect the priorities of an entire country. But emergencies are less of an issue in his opinion.
“If you look at the original COVID-19 relief bills, there were only a handful dissenting votes,” Pincin said. “If it was March 2020 again and if we had a spending restriction in place, I’m fairly confident Congress would have found the votes to overcome a spending restriction.”
For now, Biden isn’t budging on his refusal to negotiate on the debt ceiling.
Asked to address the House bill, White House Press Secretary Karine Jean-Pierre reaffirmed the president’s stance at a briefing last week.
“We have been very clear,” she said. “We need to see [Republicans] raise the debt ceiling and not take the American economy hostage. … We do not want to negotiate on this. They need to go ahead and do that and then we can have a conversation on the budget.”
Biden’s refusal to consider the GOP proposal has drawn some criticism from his own party. Sen. Joe Manchin, D-W.Va., has called the president’s stance a “deficiency in leadership.”
Democratic Reps. Dean Phillips of Minnesota, Jared Moskowitz of Florida, and Haley Stephens of Michigan have also publicly expressed an interest in negotiations while maintaining their support for Biden.
McCarthy says he is willing to talk cuts at any point.
Bacon believes the Limit, Save, and Grow Act can still be a starting point. He hopes that negotiation—and compromise—drive the discussion. He says his caucus will try to find areas of agreement in the meantime.
“We can’t continue business as usual and take a ‘my way or the highway’ approach or nothing will get done,” Bacon said. “That’s why the bipartisan Problem Solvers Caucus has come together to find some mutual ground on these issues.”
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